General insurance premiums in India are forecast to exceed INR3.91tn ($47bn) by 2030 based on historical data of 20 years. However, the premiums may cross the INR5tn mark by that year, considering regulatory reforms intended to achieve “Insurance for All” by 2047 and an anticipated increase in the number of market participants and intermediaries.
In comparison, non-life premiums reached CNY2.57tn in the financial year ended 31 March 2023.
These are the findings of a study carried out by academics at the Birla Institute of Management Technology (BIMTECH) based on historical premium data of all important lines of general insurance business between 2001-2022. The findings are published in the “India Insurance Report —Transforming Indian Insurance”. An outline of the report is carried by mediabrief.com.
Dr Abhijit K Chattoraj, an editor of the report, said, “India’s ageing population is expected to increase, with over 20% of the population aged 60 and above, by 2040. The growth of middle-income and high-income households in (the run-up to) 2030 will drive insurance demand. Increased use of AI and ML can help insurers understand changing risk dynamics and customer needs. Risk-Based Capital (RBC) implementation by 2024-25 can enable risk-based premium rates and product innovation. Increasing digital usage among customers will drive end-to-end digital experiences and technological applications. New online distribution models like B2C, B2B, and B2B2C will be key growth drivers.”
Additionally, several other factors are influencing the industry and have significant potential to shape its future trajectory, such as the changing profiles of insurance buyers driven by sustained awareness campaigns, especially due to the COVID-19 pandemic. The evolving profile necessitates more customised insurance products to meet individualised needs.
Furthermore, regulatory and governmental support has streamlined business processes, reducing regulatory compliance burdens and facilitating innovative product launches.
Requisites
The report suggests that to achieve the goal of “Insurance for All” by 2047, the establishment of robust self-regulatory organisations for insurers, brokers, surveyors, and InsurTech is essential. These organisations can provide impetus to business lines such as Aviation, Oil and Energy, Liability, Trade Credit, and political risks, ensuring separate monitoring instead of grouping them as a generic “miscellaneous” category.
Capital infusion is crucial to expanding insurance business and increasing insurance penetration. The industry requires a greater number of intermediaries and insurance players to sustain anticipated growth.
