A. Introduction:
On 12th July 2018 the world bank report asserted how Indian Economy zooms to new Heights as compared to first Ten Economies as under: –
| ECONOMY | GDP TRILLIONS OF US$ | REMARKS |
| USA | 19.39 | Indian economy was half of France in 2012. In 2012 Indian Economy has overtaken French Economy and in 2018 India is likely to overtake U.K.’s GDP.
In 2018 UK’S GDP is marginally more than that of India.
India’s growth rate of 7.70% overtakes China’s 6.80% |
Mr. Nilesh. M.D. & CEO of Kotak Mahindra Mutual Fund has revealed how Indian Economy excels other major Global Economies when Government Debt as percentage of GDP is compared as under: –
| ECONOMY | GOVT. DEBT % OF GDP 2008 | GOVT. DEBT. % OF GDP 2018 |
| U.S.A. | 74% | 108% |
| FRANCE | 69% | 96% |
| P. R. CHINA | 27% | 51% |
| JAPAN | 183% | 236% |
| U. K. | 50% | 86% |
| INDIA | 75% | 69% |
Thus, Indian Economy zooms. Insurance and Reinsurance are parameters of Economic growth.
The Indian Insurance and Reinsurance Industry is supportive of this upswing of zooming Indian Economy.
B. OVERVIEW OF INDIAN INSURANCE / REINSURANCE INDUSTRY:
Since 1st April 2001 Indian Insurance and Reinsurance Market was liberalized and globalized with competition between Public Insurance Companies and Private Insurance Companies separately for Life and Non-Life Insurance Business with Equity partnership of Foreign Insurers with 26% shares which is now increased to 49%.
India like other insurance markets has cyclical period of Natural Catastrophes. Manmade catastrophes of Terrorism is also faced with Market Terrorism Pool since 2002.
A Statement of Indian Market statistical data is prepared which is based on SIGMA Reports since 2001 to 2017 with estimates for 2018 is attached in Appendix – A.
With the last four years since 2014 Indian Economy zooms to new heights with India’s GDP as 6th rank of world GDP. Indian economy’s Agriculture sector and Health for Rural-Urban Poor and Middle Classes – entry of these masses into main stream of Banking and finance sector coverage etc. have made India a focal point of Global Leaders of Insurance and Reinsurance.
Reinsurers of the world are capacity providers to insurers of the World Markets. Global spread of Local Risks and Reinsurance Cessions after retentions are specific Principles of Reinsurance.
Today India has given entry to all the major Global Reinsurers like Munich Re, Swiss Re, Hanover Re, SCOR, Gen Re, XL Catlin, Amlin and Markel Syndicate with 100% capital base of I.Rs. 5 Billion each. India has all the best capacity providers and globally strong National reinsurers like GIC Re and the new Reinsurance company ITI.
Indian Market scenario today is with following trends of growth with the upward swing of zooming economy of India.
C. SOME FACTS AND FIGURES OF INDIAN INSURANCE MARKET SCENARIO SINCE 2013 TO 2017 AND ESTIMATE FOR 2018 BASED ON SIGMA REPORTS:
A statement of Indian Insurance Market Statistics based on SIGMA Reports attached.
1. INSURANCE PREMIUMS: IN US$ BLN.
| INSURANCE PREMIUMS | 2013 | 2014 | 2015 | 2016 | 2017 | EST. 2018 |
| LIFE | 52.17 | 55.30 | 56.68 | 61.82 | 73.24 | 80.00 |
| NON LIFE | 13.40 | 14.59 | 15.10 | 17.41 | 24.76 | 25.00 |
| TOTAL | 65.57 | 69.89 | 71.78 | 79.23 | 98.00 | 105.00 |
II. PER CAPITA PREMIUMS
| 2013 | 2014 | 2015 | 2016 | 2017 | EST. 2018 | |
| LIFE | 41.00 | 44.00 | 43.20 | 46.50 | 55.00 | 60.00 |
| NON-LIFE | 11.00 | 11.00 | 11.50 | 13.20 | 18.00 | 20.00 |
| TOTAL | 52.00 | 55.00 | 54.70 | 59.70 | 73.00 | 80.00 |
III. INSURANCE PENETRATION AS % OF GDP
| 2013 | 2014 | 2015 | 2016 | 2017 | EST. 2018 | |
| LIFE | 3.10% | 2.10% | 2.92% | 2.72% | 2.76% | 2.80% |
| NON-LIFE | 0.80% | 0.70% | 0.72% | 0.77% | 0.93% | 0.98% |
| TOTAL | 3.90% | 3.30% | 3.44% | 3.49% | 3.69% | 3.78% |
OBSERVATIONS:
a. Insurance Premium /growth rate is increasing steadily since 2014 to 2018.
b. Per Capita Premium also increases despite population growth with 1,341 Mln. In 2017.
c. Agricultural insurance’s premium has increased from Rs. 85 Bln. In 2015 to 260 Bln. In 2017.
d. A large section of population is covered by Life, Health, Agricultural and Comprehensive Package for Rural Population.
e. GIFT CITY at Gandhinagar, Gujarat is evolving as International Finance Tec City with Tax incentives for International Reinsurance transactions. It is emerging as an international Hub for Trade and Commerce.
f. In Asian Region India’s onward march with strength and stability is with supportive Insurance and Reinsurance Industry of India.
g. Neighboring markets of Nepal and Bhutan are given strength to solvency margins of these countries Insurers despite Major earthquake events in Nepal in 2015 and Mega Risks of hydro power plants in Bhutan constructed with Indian Companies collaboration and India’s Insurance Industry support. Almost 40% of Nepal’s earthquake losses were borne by GIC Re and Indian Public /sector Insurers like Oriental and National.
h. Global Reinsurers like Munich Re, Swiss Re, Hanover Re, SCOR, Gen Re, XL Catlin, Amlin and Markel Syndicate have entered Indian Market since 2016 -17 with priority in cessions base for Indian Insurers to make Outward Reinsurance Cessions after GIC Re as they have first right of refusal. Transfer of latest technologies in the digital era of Indian Insurance and Reinsurance Market and future scenario of Cyber Risks management and Cyber Risks coverage is open for all players with Reinsurance Protection.
i. Artificial Intelligence in usage has overtaken Human Intelligence in the use of latest I.T. Technologies and most sophisticated software/hardware computerization. Hacking of huge data base of Banks, Financial institutions and Industrial Corporates needs Cyber Risks Insurance Protection. With the upswing of Economic developments in Small, Big and Mega sectors of Indian Economy there are challenges of Vertical Mega Risks exposure as well as huge accumulations of Risks in event of Natural Catastrophes caused by Acts of God Perils. Indian Market Insurers and Reinsurers are supportive of these challenging scenarios.
j. Thus new “India” is emerging as a big market of insurance with its ability to meet all challenges of changing times.
IT technological Revolution is a process of continuous innovative changes.
k. Indian insurance industry is also supportive of digitalization as the most current trends of economic developments in India.
The Indian Economy is emerging as strong and steady economy and let us hope by 2020 it may also reach 4th rank with India’s GDP as percentage of World GDP.
India is emerging a Asian Hub of Insurance and Reinsurance of SAARC countries.
The Global (Re) insurance Markets have to be prepared for Cyber Risks Management Technologies to make IT data “Hacking proof” for insurance and Reinsurance protection.
Indian Economy and Indian Insurance and Reinsurance Industry are growing hand-in-hand. “Future” is bound to be in better hands with better technologies.
