Global rating agency Moody’s Investors Service in its latest report has said that Indian insurance and reinsurance industry will register strong growth on the back of robust Gross domestic product (GDP) expansion and evolving regulatory regime. It indicated that during fiscal 2018, total gross premiums for the non-life and life insurance sectors grew 11.5 percent to Rs 6.1 trillion, bringing the five-year compound annual growth rate (CAGR) to 11 per cent.
Moody's also projected India’s real GDP to grow at 7.4 percent in fiscal 2019 and at 7.3 percent in 2019-20, making India one of the world's fastest-growing economy. It also said that the Insurance Regulatory and Development Authority of India (IRDAI) is proactively introducing regulations that will support insurers' balance sheets and improve their access to capital, a credit positive. According to the report, liberalisation of the reinsurance sector - with the admission of foreign reinsurers since 2017 and IRDAI's steps to ensure that they can compete with incumbents - will specifically benefit the non-life sector. It noted that regulatory reforms will also improve the sector's capital strength.
Rating agency further informed that in 2015, IRDAI raised the ceiling on foreign ownership of Indian insurers to 49 percent from 26 percent, encouraging global players to buy holdings in local entities. It added that the government's launch of a new program in 2018 to provide health insurance for 100 million families is credit positive as it will help grow health premiums and provide insurers with cross-selling opportunities.