Business and consumer sentiment in India have improved significantly on expectations of a strong push towards economic reform and liberalization by Prime Minister Modi. Premiums were up by 7.7% after five years of contraction and stagnation due primarily to regulatory changes. Non-life insurance premiums grew by 7.9%, up from 2.7% in 2014, due to a stronger economy. India is expected to contribute to a healthy growth of non-life premium in emerging Asia in the coming two years.
Underwriting results have been healthy in the non-life sector in emerging markets.
* However insurers in India suffered heavy losses from flooding in Kashmir and cyclones on the eastern coast of India in 2014–2015.
Life and Health Premiums
L&H premiums are increasingly concentrated in emerging Asia, which had a 69% share of the emerging market total in 2015.
* Growth was strong in India, with an acceleration due to a revival of unit-linked products and improved performance in bancassurance.
Revamping Solvency and Capital Regimes
* In India, there was an important development in March 2015 with the passing of the Insurance Laws (Amendment) Bill. The most important items in the Bill are:
# Raising of the foreign direct investment (FDI) ceiling in Indian insurers to 49% from 26% and
# Allowing foreign reinsurers to establish branch offices in India.
These are expected to significantly facilitate foreign participation in the booming Indian market.
The Liability Market
* India is the sixth largest liability market in Asia with estimated premiums of USD 254 million in the year 2014.
# The market is still underdeveloped, with penetration of just 0.01% of GDP. Underwriting profits, though, have remained strong.
# Rates in liability have been stable over the last couple of years with the exception of medical malpractice, where they increased by 10–20% in 2014.
# General liability is the biggest line of business currently.
# Recent trends suggest that after the enactment of a new Companies Act in 2013, there has been an uptick in corporate interest in D&O liability cover.
# More engineering, pharmaceuticals and automotive companies are buying product liability insurance. Demand for professional indemnity is also increasing.
Mortality Protection Gap
The mortality protection gap is the difference in actual protection compared to the protection needed to sustain a household at its same living standard after the death of a breadwinner. The aggregate mortality protection gap in 13 Asia-Pacific markets widened to USD 58 trillion in 2014 from USD 42 trillion in 2010.
* India has the second largest mortality protection gap in absolute terms, at USD 8.6 trillion.
Mobile Data and Technology
Insurers are using mobile data and mobile technology to track potential claims, identify policyholders, reduce graft, speed up claim verification and processing, and lower the cost and headcount required for processing claims.
* In India, financial services company FINO has used smart-card based biometric authentication technology to verify claimant identity, and IFFCO-Tokio has used biometric tags for cattle to reduce fraud in livestock insurance.