January

2024

India’s insurance market: growing fast,

with ample scope to build resilience

02 Executive summary
03 Key takeaways
04 Macroeconomic outlook
06 Insurance industry
outlook
11 Natural catastrophe
risk landscape and
protection gap
18 Regulatory developments
2 Swiss Re Institute India’s insurance market: growing fast with ample scope to build resilience
Executive summary
We estimate that India’s economy grew
by 6.7% in real terms in 2023.
India’s insurance market is set to be
the fastest growing of the G20 countries
over the next five years...
...after a slight moderation in growth
in 2023.
Natural catastrophe risks grow
continuously, but associated insurance
penetration in India is still low.
Government and regulatory initiatives
should support further development of
India’s insurance market.
The global economy held up better than anticipated in 2023, despite several challenges
such as high inflation, tight financial conditions and geopolitical tensions. We estimate
that global real GDP grew by 2.6% in 2023, down from 2.8% in 2022. Meanwhile,
India’s economy has remained resilient and at an estimated 6.7%, growth in 2023 will
outpace that of other major economies. This robust growth is supported by private
consumption and fixed investment. On the inflation front, we estimate consumer price
inflation in India to cool to 5.7% in 2023 from 6.7% in 2022 due to monetary policy
tightening. The central bank raised the policy rates by 250 basis points (bp) from 4% to
6.5% between April 2022 and March 2023. Those interest rate hikes, and also El Nino
effects, rainfall deficits, and geopolitical tensions (including the war in the Middle East,
which could impact oil prices) are some downside risks for India’s growth outlook.
Economic growth, an expanding middle class, innovation and regulatory support is
driving insurance market growth in India. Over the next five years (2024‒28), we
forecast that total insurance premiums will grow by 7.1% in real terms, well above the
global (2.4%), emerging (5.1%) and advanced (1.7%) market averages. At this rate, India
will have the fastest growing insurance sector of the G20 countries. We expect robust
growth in life business (premiums up 6.7% in 2024‒28), supported by rising demand for
term life cover by the middle-class and the country’s young population, and also
increasing industry adoption of Insurtech. Non-life premiums are forecast to grow by an
annual average of 8.3% during 2024‒28, driven by economic growth, improvement in
distribution channels, government support and a favourable regulatory environment.
In 2023 alone, premium growth moderated slightly from the previous year, reflecting
still-in-process adjustments to the post COVID-19 era. We estimate that life premium
growth slowed to an estimated 4.1% from 5.9% in 2022 as memories (ie, risk
awareness) of the pandemic faded, and a recent change in tax norms for high-ticket
policies weighed on new premium growth. Non-life premium growth moderated slightly
from 9.0% in 2022 to an estimated 7.7% in 2023, as the market continued to stabilise
after the pandemic. Macro dynamics such as high interest rates, and elevated retail and
medical inflation also presented some headwinds to non-life sector growth.
Alongside the expanding economy and growing insurance market, India is exposed to
many natural catastrophes, including earthquakes, floods, tropical cyclones, drought and
wildfires. However, insurance protection against natural catastrophe risks is low: our
resilience analysis indicates that 93% of the exposures are uninsured. Economic losses
due to natural disasters have been on an upward trend for many years, driven mainly by
economic growth and rapid urbanisation. India’s major cities have high population- and
asset-value concentrations, and many are exposed to multiple natural hazards. One
challenge in bridging the large protection gap is limited awareness and perception of the
risks. The industry also faces challenges in underwriting, with a need for more granular
data on existing natural catastrophe exposures, and establishing more robust modelling
capabilities. India has made strong progress in setting up early warning systems for
tropical cyclones, but there is a long way to go on this front for other hazards (eg, floods).
The Indian government and insurance regulator have taken several steps to support
industry growth. Important among these is the mission “Insurance for all by 2047”
launched in November 2022, the main aim of which is to ensure that every citizen and
enterprise has appropriate insurance cover/solution. There are also initiatives to attract
foreign interest to the market. These reforms, along with robust economic growth,
should support further development and expansion of the insurance sector.
 India’s insurance market: growing fast with ample scope to build resilience Swiss Re Institute 3

Key takeaways
India’s insurance sector is on track for a strong growth
We forecast that India’s insurance market will be the fastest growing among the G20 nations with an average expected growth rate
of 7.1% over 2024‒28.

Premium volume Change Share of world Insurance Insurance density

(in USD billion) (in %, inflation adjusted) market (in %) penetration (in (in USD)
% of GDP)
CAGR
2023E 2028F 2023E 2024‒28F 2023E 2023E 2023E
Total business
India 141 224 5.0% 7.1% 2.0% 3.8% 98.1
Emerging markets 1 395 2 126 6.6% 5.1% 19.5% 2.8% 198.8
Emerging Asia excl. China 226 355 4.5% 6.9% 3.2% 2.9% 95.3
Global 7 152 9 118 1.6% 2.4% 100.0% 6.5% 885.4
Life business
India 105 163 4.1% 6.7% 3.3% 2.9% 73.0
Emerging markets 812 1 243 7.7% 5.2% 26.0% 1.6% 115.7
Emerging Asia excl. China 160 248 3.5% 6.7% 5.1% 2.1% 67.2
Global 3 130 4 025 1.5% 2.5% 100.0% 2.8% 387.5
Non-life business
India 36 61 7.7% 8.3% 0.9% 1.0% 25.1
Emerging markets 583 883 4.9% 5.0% 14.5% 1.2% 83.1
Emerging Asia excl. China 67 107 6.9% 7.4% 1.7% 0.9% 28.1
Global 4 022 5 093 1.6% 2.3% 100.0% 3.7% 497.9

E = estimates; F = forecasts; CAGR =compound annual growth rate

Source: Swiss Re Institute

Natural catastrophe average annual losses are increasing in India

The average annual economic loss over the last decade (2013‒22) was USD 8 billion (inflation adjusted), 125% higher than the
average of the previous decade (USD 3.8 billion, 2003‒12).
30 Cyclone Vardah, Uttarakhand wildfire Cyclone Taukte
and southern India drought and Cyclone Yaas

25 Chennai floods Cyclone

Amphan
Cyclone Hudhud, and floods
20 Surat Jammu and Kashmir
floods floods All India
floods
Northern India Mumbai Uttarakhand floods, and
15
floods floods Cyclone Phalin Cyclone
Bhuj Fani
Southern
10 earthquake India floods

0
2000

2004

2006
2005

2008
2009
2003
2002
2001

2007

2022
2020
1984
1980

1988

1990
1983

2021
1985
1986

1989

1994

1996
1995

1998
1999
1982

1993
1992

2010
1987

2016

2018
1977

1981

1997

2013
2014
2015

2019
1991

2012

2017
1973

1975
1970

1972

1978
1979
1976

2011
1971

1974

Insured losses Uninsured losses

Source: Swiss Re Institute
4 Swiss Re Institute India’s insurance market: growing fast with ample scope to build resilience

Macroeconomic outlook
The global economy grew more The global economy held up better than anticipated in 2023 in the face of many
than anticipated in 2023, but we see challenges including inflation, tight financial conditions and escalating geopolitical
slowdown ahead. tensions. That said, divergence is rising and we expect a broad-based global slowdown
in 2024 as monetary policy headwinds strengthen and growth tailwinds fade. We
expect the US will continue to grow, although at a slower pace than last year, while
Europe’s economy stagnates and China continues to grapple with structural domestic
weaknesses. We estimate that global real GDP grew by 2.6% in 2023, down from 2.8%
in 2022, and that it will moderate further to 2.2% in 2024, the weakest since the global
financial crisis (1.2% over 2007‒09) other than during the pandemic. We forecast
strengthening growth of 2.7% in 2025. Price pressures should ease this year, but
inflation will remain above central bank targets in most advanced markets. Sovereign
bond yields in advanced economies rose to multi-year highs in 2023, signaling
normalisation in the cost of capital that we expect to persist mid-term.1

India’s economy remained resilient Meanwhile, India’s economy remained resilient in 2023 despite high inflation globally,
in 2023… rupee weakness and high borrowing costs. We expect India to remain among the fastest
growing economies this year, with strong private consumption, and public and private
sector fixed investments offering support. In its last few rounds of 2023, the Reserve
Bank of India’s (RBI) Consumer Confidence Survey consistently delivered positive
response on the year-ahead outlook, suggesting consumer spending will strengthen.2
We estimate that real GDP growth was around 6.7% in 2023, down from 7.2% in 2022,
and see slight moderation to 6.2% in 2024 (see Figure 1).3 Our medium-term outlook
remains positive, with average annual real GDP growth projected at 6.4% between 2024
and 2028. That puts growth in India ahead of major emerging Asia economies such as
China (4.3%) and Indonesia (4.9%), emerging Asia excluding China (5.6%), and also
emerging markets overall (3.7%).

Figure 1 10%
Real GDP growth trend (2017‒28F)
8%

6%

4%

2%

0%

–2%

–4%

–6%
2017 2018 2019 2020 2021 2022 2023E 2024F 2025F 2026F 2027F 2028F

World Advanced markets Emerging markets Emerging Asia excl. China

India China
Source: Swiss Re Institute

… with private consumption and investment
driving growth.
Last year, growth was driven mainly by strong private consumption (~58% of real GDP)
and fixed investments. The monthly service and manufacturing Purchasing Managers’
Indices (PMI) remained above 50 throughout the year,4 supported by improved
China
1 sigma 6/2023 - Risks on the rise as headwinds blow stronger: Economic and insurance market outlook
India
2024/25, Swiss Re Institute.
2 Minutes of the Monetary Policy Committee Meeting, Reserve Bank of India, 22 December 2023.
3 The years 2023 and Emerging Asia excl.
2024 = financial yearsChina
2023‒24 (April ‒ March) and 2024‒25 (April ‒ March).
This notation is followed throughout the report for India data points, unless stated otherwise.
4 A PMI number underEmerging
50 represents a contraction, at 50 indicates no change and above 50 is an expansion.
markets

Advanced markets
 India’s insurance market: growing fast with ample scope to build resilience
Inflation remains cause for concern.
Figure 2
India real GDP growth, CPI inflation (2017‒28F)
We are positive on the medium-term
economic outlook for India, and cognizant
of some downside risks.
Swiss Re Institute 5
consumer confidence and pent-up demand. The Index of Industrial Production (IIP)
growth has also picked up momentum, reaching a 16-month high of 11.7% in October
2023 on the back of healthy expansion of the manufacturing sector and steep rise in
electricity output.5 On the investment side, both private and public capital expenditure
(capex) appears to have recovered. Private corporate investments, driven by bank and
financial institution-sanctioned projects, rose for the second year in a row in 2022
following a period of restraint in 2019 and 2020, and public capex increased by 37.4%
in 2023 compared to a 22.8% gain as in the budget statement of the previous year.6
Headline consumer price inflation remained elevated at an estimated 5.7% in 2023,
down from 6.7% in 2022 (see Figure 2). The RBI raised policy rates by 250 basis points
(bp) from 4% in April 2022 to 6.5% in March 2023 (see Figure 2). Headline inflation
declined to 5.6% in November 2023 from the peak of 7.4% in July 2023, while that of
food and beverages fell to 8.0% from 10.6% during the same period. We expect inflation
to remain elevated as headwinds from higher food prices due to El Nino effects, and
deficits in rainfall and other extreme weather conditions continue to put pressure on
prices. A deficit in the southwest monsoon season during June and September 2023 led
to crop losses and a low harvest, causing food prices to spike.7 As a result, the central
bank decided to keep policy rates on hold in December. We expect rates to remain on
hold till the impacts of last year’s hikes pass through to the economy, and inflation comes
down closer to the RBI’s target.
10%
8%
6%
4%
2%
0%
–2%
–4%
–6%
2017 2018 2019 2020 2021 2022 2023E 2024F 2025F 2026F 2027F 2028F
CPI inflation Real GDP growth
Source: Swiss Re Institute
We are positive on the medium-term economic outlook for India, there are downside
risks. Elevated consumer prices pose a considerable risk to growth, leaving limited space
for rate cuts, meaning still-high borrowing costs for capital investments. Further, India
depends on crude oil imports and any rise in energy prices due to the ongoing conflict in
CPI Inflation
the Middle East would further add inflation pressures. Meanwhile, the projected
slowdown in the global economy would impact exports, which might be exacerbated if
Real GDP growth
ongoing geopolitical conflicts disrupts global supply chain. This, along with the strong
US bond yield will weigh on the rupee, although we expect depreciation pressures to
ease in the latter part of 2024.
5 “Industrial production grows to 16-month high of 11.7% in October”, Indian Express, 13 December 2023.
6 Press release, Ministry of Finance, 1 February 2023, and ”Private Corporate Investment: Performance and
Near-term Outlook”, RBI Bulletin, August 2023.
7 Monetary Policy Statement, 2023-24 Resolution of the Monetary Policy Committee, October 4 to 6, 2023,
Reserve Bank of India, 2023.
6 Swiss Re Institute India’s insurance market: growing fast with ample scope to build resilience

Insurance industry outlook

A strong economy, innovation and a
favourable regulatory environment will
drive insurance market growth in India.
India’s insurance industry is growing rapidly supported by robust economic growth,
an expanding middle class, innovation and strong regulatory support. The Insurance
Regulatory and Development Authority of India (IRDAI) has a target that all citizens
should have “appropriate life, health and property insurance cover” by 2047 and has
announced several initiatives and reforms to this end.8 Over the next five years
(2024‒28), we forecast that total insurance premiums will grow by 7.1% over, well above
the global (2.4%), emerging (5.1%) and advanced (1.7%) market averages (see Table 1).
At this rate, according to our projections India will be the fastest growing among the G20
nations. We forecast that over the next decade (2024‒34), total premiums will more
than double (inflation adjusted), and insurance penetration will increase from 3.8%
currently to 4.5% in 2034.

Table 1
Snapshot of insurance markets, India and aggregate global regions

Premium volume Change Share of world Insurance Insurance density

(in USD billion) (in %, inflation adjusted) market (in %) penetration (in (in USD)
% of GDP)
CAGR
2023E 2028F 2023E 2024‒28F 2023E 2023E 2023E
Total business
India 141 224 5.0% 7.1% 2.0% 3.8% 98.1
Emerging markets 1 395 2 126 6.6% 5.1% 19.5% 2.8% 198.8
Emerging Asia excl. China 226 355 4.5% 6.9% 3.2% 2.9% 95.3
Global 7 152 9 118 1.6% 2.4% 100.0% 6.5% 885.4
Life business
India 105 163 4.1% 6.7% 3.3% 2.9% 73.0
Emerging markets 812 1 243 7.7% 5.2% 26.0% 1.6% 115.7
Emerging Asia excl. China 160 248 3.5% 6.7% 5.1% 2.1% 67.2
Global 3 130 4 025 1.5% 2.5% 100.0% 2.8% 387.5
Non-life business
India 36 61 7.7% 8.3% 0.9% 1.0% 25.1
Emerging markets 583 883 4.9% 5.0% 14.5% 1.2% 83.1
Emerging Asia excl. China 67 107 6.9% 7.4% 1.7% 0.9% 28.1
Global 4 022 5 093 1.6% 2.3% 100.0% 3.7% 497.9

E = estimates; F = forecasts; CAGR =compound annual growth rate

Source: Swiss Re Institute

Life insurance premium growth to remain robust

Life sector growth to moderate to 4% in
2023 due to fading risk awareness and
a change in tax norms.
The life market accounts for around three quarters of total insurance premiums in India.
We estimate that life premiums grew by 4.1% in 2023, higher than historical average
(2012‒21: 3.2%) but less than in 2022 (5.9%) due to the fading risk awareness and a
recent change in tax norms for high-ticket policies weighed on new premium growth (see
Figure 3).9 New business premiums, after having increased by 40% in the first quarter of
2022 year-on-year (yoy), contracted in the fourth quarter (‒7.0% yoy). That momentum
continued into 2023, with second quarter premiums down 21.2% yoy, mainly due to
contraction in group business.10 Looking ahead, a proposal to limit the tax exemption from
proceeds of insurance policies with very high value (> INR 500 000/USD 6 250 annual
premium) should adversely affect sales to high net-worth Individuals (HNIs), who mainly
invest in savings business.

8 Insuring India by 2047- New Landscape for Insurance Sector, IRDAI, 25 November 2022.
9 “Life insurance companies clock a 25.28% drop in premiums, shows data”, Business Standard,
7 December 2023.
10 Calculations based on the monthly data (as per financial years) for new life insurance business from the IRDAI.
 India’s insurance market: growing fast with ample scope to build resilience Swiss Re Institute 7

Figure 3
Life insurance premiums written (USD bn, LHS) in India, and total life real growth (%, RHS), for period 2017‒2028F

200 Premiums written Real life premium growth 10%

160 8%

120 6%

80 4%

40 2%

0 0%
2017 2018 2019 2020 2021 2022 2023E 2024F 2025F 2026F 2027F 2028F

Risk premiums Savings premiums Real life premium growth

Source: Swiss Re Institute

We forecast that life business will grow
by 6.7% in medium term.
Savings premiums
Risk premiums
Real life premium growth
We expect life premium growth to pick up and forecast an average annual increase of
6.7% in 2024‒28, supported by rising demand for term life cover by the middle-class,
younger demographic, and also increasing industry adoption of Insurtech.11 Growth will
be delivered through all distribution channels as insurers focus on expanding agency
headcount and adding additional bank partners to diversify their channel mix. Individual
agents and bancassurance are the main distribution channels in India.12 To make the
bancassurance channel more efficient and increase its penetration, the IRDAI has put
together a taskforce with representatives from several banks and insurers.13 The
regulator is also actioning other initiatives to raise insurance penetration (see section
Regulatory Developments).

How inclusive is India L&H insurance market?

No L&H insurance market in the world Last year, Swiss Re Institute (SRI) published its Life & Health Insurance Inclusion Radar
is 100% inclusive. study, which considered the degree of inclusivity of the L&H markets in 16 countries,
based on three dimensions: the Availability, Accessibility and Affordability (the “3As”)
of insurance in each market.14 By highlighting the 3A strengths and weaknesses of
individual markets, the radar analysis helps identity areas of room for improvement.
Overall, the results suggest that no L&H insurance market is highly inclusive. Among
the markets covered by the study, India ranked as the sixth most inclusive.

11 India Life Insurance Market Gaining Grounds Forecast to Grow at a CAGR of 6.0% by 2028, BlueWeave
Consulting, 1 January 2022.
12 India Insurance: We forecast better-than-expected life new business value in 1Q24 and prefer GIC Re over
primary players, Asia Pacific Equity Research, J.P. Morgan, 18 July 2023.
13 “Bancassurance channel: IRDAI constitutes taskforce to review model, carry out modifications”, The Hindu,
1 November 2023.
14 The Life & Health Insurance Inclusion Radar, Swiss Re Institute, 14 March 2023.
8 Swiss Re Institute India’s insurance market: growing fast with ample scope to build resilience
Figure 4
L&H Inclusion Radar for India
There is scope to improve underwriting
innovation in India, and to make insurance
more affordable.
Non-life premiums grow by an estimated
7.7% in 2023.
Health insurance premiums to grow by
an estimated 11% in 2023, highest of all
non-life lines.
Skills and market
development
Market Product range
participation Ava and innovation
ila
bi
lity
y
Regulatory
Affordabilit
Underwriting
incentives
spectrum
and support
Socio-economic Financial
wellbeing literacy
it y
i bil
Access
Life insurance Distribution
reach diversity
Source: Swiss Re Institute
The idea of inclusive insurance is to offer relevant risk cover to all irrespective of income or
other socio-economic distinction. India’s “inclusivity strengths” relative to other markets
are high use of financial services and strong regulatory support. Nevertheless, the analysis
also points to scope for improvement in underwriting innovation, and in terms of making
insurance more affordable. With upcoming initiatives from the IRDAI to increase insurance
penetration such as Bima Sugam, Bima Vahak and Bima Vistaar (see Regulatory
Developments on p18 for more on these initiatives), the market should become more
inclusive over the medium term by making insurance more affordable for more people.
Non-life insurance business likely to remain aligned with macro dynamics
Similar to life, we estimate that non-life premiums (including health) grew strongly in
2023, by 7.7% in real terms. That was slightly less than the historical annual average
(2012‒21: 8.0%) and also than in 2022 (9.0%, see Figure 5). Growth in almost all lines
of business slowed last year as the industry continued to stabilise after the pandemic.15
The sector also faces headwinds such as economic slowdown, high interest rates, and
elevated retail and medical inflation. We forecast robust growth in the medium term, with
premiums up an annual average of 8.3% during 2024‒28, driven by improvement in
macro environment, strong distribution channels, government support and a favourable
regulatory environment. Investments in Insurtech, digitalisation and the expanding
middle-class will also be significant contributors to growth.16
Health is the largest line of non-life business in India, accounting for around 35% of sector
premiums written in 2023. We also estimate that with an 11% increase in premiums,
health saw the fastest growth of all non-life lines of business last year (though slower than
the 15% gain in 2022). This growth is supported by increased awareness over health,
supportive government policies, rising medical costs and innovations in Insurtech.
Although, price and income constraints may limit demand for the lower income groups,
the expanding middle class and increased discretionary spending should support overall
growth. Further, to provide health insurance to low-income households, Ayushman Bharat
– Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) and State government extension
schemes are in place. Recently, AB-PMJAY achieved a milestone of generating 26 crore
Ayushman cards across India, with 49% of them held by females.17 In medium-term, we
forecast that health premiums will grow by 9.7% annually in 2024‒28, with regulatory
initiatives to improve the attractiveness of insurance offering some support.18
15 India Insurance Report Q1 2023, Fitch Solutions, 2023.
16 Driven by strong growth potential, A.M. Best recently revised India’s non-life insurance segment outlook from
negative to stable. See: Market Segment Outlook: India Non-Life Insurance, A.M. Best, 4 December 2023.
17 “26 crore Ayushman cards created across country: Health Ministry”, The Economic Times, 20 October 2023.
18 Recently the General Insurance Council has decided to take action against the hospitals that are overcharging
the health insurance policy holders and indulge in any kind of frauds. See “Non-life Insurers To Punish
Fraudulent Hospitals”, Moneylife, 12 April 2023. Also, the IRDAI recently announced its collaboration
with several health insurance players in India to make 100% cashless settlement for medical expense
claims. See Working with health insurers for 100% cashless medical claims: IRDAI Chairman”, The Hindu
BusinessLine. Further, the IRDAI has also directed the health insurers to update and simplify the format
for Customer Information Sheet (CIS) to enhance transparency and provide complete information to the
policyholders in simple words. The updated CIS will come into effect from 1 January 2024.
 India’s insurance market: growing fast with ample scope to build resilience Swiss Re Institute 9

Motor premium growth to rise to an
estimated 8.8% in 2023 from 7.9%
in 2022, on the back of a jump-up in
auto sales.
Motor is the second largest line of business in non-life, with nearly 32% market share.19
We estimate that motor premiums grew by 8.8% last year, marginally higher than in 2022
(7.9%). There has been a recovery in automobile sales since the first quarter of last year
and the trend is expected to continue, with 6‒9% growth in private vehicle sales in the
next financial year, and 7‒10% for commercial vehicles.20 Sales are expected to remain
robust across the automotive segment over the medium to long term due to rising per
capita incomes, demographic profile, low vehicle penetration, and favourable policy
environment.21 In addition, there has been increasing demand for electric vehicles (EVs) in
the past two years and this will likely continue due to government subsidies under FAME-II
policy, higher awareness and more product launches.22 We forecast average annual
premium growth of 8.8% for the motor sector overall in the 2024‒28 period.

Real premium growth for crop insurance Agriculture insurance is the third largest line of business, accounting for around 12% of
flat in 2023. the non-life market. We estimate flat growth in 2023 due to a sharp decline (‒32%) in
premium rates in the Kharif cropping season (June to September).23 The declines more
than offset, in terms of millions of hectares, the increase in the insured land area and also
enrolments during the season. We expect agriculture premiums to start rising from 2024
onwards and forecast on average 2.5% real premium growth annually over the medium
term, supported by improvements in insurance infrastructure such as mobile applications
and remote sensing for crop loss monitoring. These will be supported by various
government initiatives to address current concerns around crop insurance. For example,
the government recently launched several new technological initiatives such as YES-Tech
Manual, WINDS portal, and enrolment app AIDE/Sahayak to assess crop damage via
satellite-based advanced technologies, and with door-to-door enrolment initiatives
making cover more accessible.24 In addition, in July 2023 the Minister of Agriculture
announced the de-linking of subsidies to ensure timely claims pay outs.25

Figure 5
Premium share by non-life line of business in India (USD bn, LHS), and total non-life real premium growth (%, RHS), for period 2017‒28F

100 Premiums written Non-life premium growth 15%

80 12%

60 9%

40 6%

20 3%

0 0%

–20 –3%
2017 2018 2019 2020 2021 2022 2023E 2024F 2025F 2026F 2027F 2028F

Health and Personal Accident Motor Agriculture Fire Others Total non-life real premium growth
Source: Swiss Re Institute

19 There are two types of motor insurance in India : own damage and third-party insurance. Own damage is
voluntary, and third party is mandatory.
20 Absolute numbers from India: automobile industry sales by type 2023, Statista; growth forecast from

OpenMedia, ICRA.
21 “Electric two-wheelers lead EV sales in India, passenger vehicles to grow 6-9% in FY24: ICRA”, cnbctv18,
Others GWP
31 October 2023.
22 The Faster Adoption and Manufacturing of Electric Vehicles (FAME) Phase II policy launched in 2019 is a
Fire GWP subsidy programme to support demand for EVs. The subsidy amount depends on the type of vehicles and/or
capacity of battery.
Agriculture GWP 23 “Increase in farm insurance enrolments for two years in row”, Hindustan Times, 12 October 2023.

24 “Centre launches Technological Advancements in Crop Insurance to Empowering Farmers and Streamlining

Operations in PMFBY”, Ministry of Agriculture & Farmers Welfare, 21 July 2023.

Motor GWP
25 Ibid.

Health and Personal Accident GWP

Real life premium growth

10 Swiss Re Institute India’s insurance market: growing fast with ample scope to build resilience

India’s insurance resilience low, indicating opportunity to grow

India has low levels of insurance resilience
relative to global averages...
The 2023 update of the annual global sigma resilience index included a measure crop
resilience, in addition to the insurance resilience indices for mortality, health, and
natural catastrophe risks. The results indicate that India’s resilience is low relative to the
global average for each of these perils (see Table 2). The Resilience Index shows the
protection available as a percentage of protection needed.26 For example, the
Resilience Index for mortality for India in 2022 was 9.2%, suggesting that life insurance
(private and public sector) covers less than 10% of existing needs. The USD 44.8 billion
protection gap estimate is a measure of this lack of coverage in absolute terms.27

...but between 2016 and 2022, its
insurance resilience improved at a faster
rate than the global average.
However, insurance resilience in India improved at a faster rate than the global average
during 2016 to 2022, across all categories, except for crop insurance. Crop resilience,
though, improved in 2022 from 2021 due to increase in insurance coverage.
Meanwhile, India’s crop insurance protection gap (USD 31.1 billion in 2022) remains
high, accounting for more than a quarter of global protection gap (USD 113 billion), as
insurance penetration remains very low compared to growing crop output. India’s crop
resilience is important given that the country is the second largest producer of crops
globally and key to world food security. Natural catastrophe protection also improved,
from 5.6% in 2016 to 6.5% in 2022. Mortality and health resilience have positive
trends both in the short and long terms. Nevertheless, the resilience index readings
across all categories remain low compared to the global averages, pointing to the
significant scope to societal resilience with insurance. With our forecast for strong
growth in the coming years, India’s private re/insurance industry will help achieve this .

Trend developments indicate India L

Table 2
performs well relative to other emegring
India Insurance Resilience Indices, and protection gaps
markets with respect to levels of crop and
natural catastrophe insurance resilience. Resilience Index (%) Protection gap, USD bn
Change
2016 2021 2022 2022
(2022‒2021)
India
Mortality 8.6% 9.0% 9.2% 44.8
Health 22.0% 27.0% 27.0% ¬ 50.3
Crop 17.3% 11.1% 11.5% 31.1
Nat Cat 5.6% 6.9% 6.5% 8.0
Emerging markets
Mortality 33% 30% 29% 263.2
Health 47% 46% 46% 534.8
Crop 21% 34% 37% 87.9
Nat Cat 6% 5% 5% ¬ 183.7
World
Mortality 47% 44% 43% 405.7
Health 78% 77% 78% 888.5
Crop 28% 39% 41% 113.0
Nat Cat 24% 24% 24% 367.6

Source: Swiss Re Institute

26 We measure resilience as how well an economy, business or household can withstand an unexpected
financial shock such as a natural catastrophe or the death of a breadwinner. The value of I-RI ranges from
0–100%. The greater the value, the greater the protection relative to the needs and the higher the resilience.
Protection gaps are measured in premium equivalent terms, which indicate the uninsured or unprotected
portion of total protection needs.
27 The protection gap is the uninsured or unprotected portion of the resources needed to fully mitigate risk.

For more on the insurance resilience indices, see sigma 2/2023: Restoring resilience, Swiss Re Institute.
 India’s insurance market: growing fast with ample scope to build resilience Swiss Re Institute 11

Natural catastrophe risk landscape

and protection gap
On average, natural catastrophes cause
annual economic losses of USD 8 billion
in India.
India is exposed to many natural perils including floods, landslides, tropical cyclones,
seismic activity (earthquakes, tsunamis), droughts and wildfires, and these often lead to
loss of lives and damage to/destruction of property and other assets.28 Figure 6 details the
economic (uninsured + insured) loss history from different natural catastrophe since 1970.
The average annual economic loss over the last decade (2013‒22) was USD 8 billion
(inflation adjusted), 125% higher than the average of the previous decade. The average
yearly growth of inflation-adjusted economic losses in India over the last 30-years
(1992‒2022) was 7.3%, compared to 4.5% in global losses over the same period.
However, peril occurrence comes with natural variability, and historical losses are volatile.29

Figure 6
Economic losses from natural catastrophes in India (USD bn, 2023 prices), for period 1970‒2022

30 Cyclone Vardah, Uttarakhand wildfire Cyclone Taukte

and southern India drought and Cyclone Yaas

25 Chennai floods Cyclone

Amphan
Cyclone Hudhud, and floods
20 Surat Jammu and Kashmir
floods floods All India
floods
Northern India Mumbai Uttarakhand floods, and
15
floods floods Cyclone Phalin Cyclone
Bhuj Fani
Southern
10 earthquake India floods

0
2000

2004

2006
2005

2008
2009
2003
2002
2001

2007

2022
2020
1984
1980

1988

1990
1983

2021
1985
1986

1989

1994

1996
1995

1998
1999
1982

1993
1992

2010
1987

2016

2018
1977

1981

1997

2013
2014
2015

2019
1991

2012

2017
1973

1975
1970

1972

1978
1979
1976

2011
1971

1974

Insured losses Uninsured losses

Source: Swiss Re Institute

Multi-billion economic losses from
single disaster events are becoming
more common.
Natural catastrophe events in India are typically rare (low frequency) but of high severity
(resulting in large losses). That said, occurrence of multi-billion US dollar economic loss
events is becoming more common. India is exposed to seismic and weather-related
hazards, many driven by the summer monsoon (June ‒ September) season when the
country receives about 80% of its annual rainfall, leading to inundation in different areas
every year.30,31 Since the turn of the century, there have been a number of large-loss flood
events including in Mumbai in 2005, Uttarakhand (Kedarnath) in 2013, Jammu and
Kashmir in 2014, Chennai in 2015, Kerala in 2018 and northern India in 2023, the latter
also hitting the capital city. Single flood events causing economic losses of more than
USD 1 billion have become more regular. There were 11 such events in 2013‒22 compared
with six in 2003‒12. Tropical cyclones also strike India, typically impacting West Bengal,
Odisha, Andhra Pradesh and Tamil Nadu on the east coast, and Gujarat on the west coast.
Recent cyclones like Hudhud (2014), Vardah (2016), Fani (2019), Taukte (2021) and Yaas
(2021) caused economic losses of more than USD 2 billion (inflation adjusted).

28 India’s insurance market: poised for rapid growth, Swiss Re Institute, 2023.
29 sigma 1/2023: Natural catastrophes and inflation in 2022: a perfect storm, Swiss Re Institute.
30 “Indian summer monsoon gets a new theory”, Nature India, 30 March 2018.

31 “Influence of monsoon low pressure systems on South Asian disasters and implications for disaster

prediction,” npj Climate and Atmospheric Science, 27 May 2023.

12 Swiss Re Institute India’s insurance market: growing fast with ample scope to build resilience

Economic growth and urbanisation have With rapid economic growth and urbanisation, the exposure landscape in India has
fundamentally altered the risk landscape. changed fundamentally. India’s economy has grown from USD 317 billion in 1980 (at
2022 prices and FX) to USD 3 465 billion in 2022, an increase of around 995%. This
development has been mostly concentrated in urban areas, primarily a few major cities.
The total urban population of the country increased by ~200% between 1980 and
2022, and more than 500 million people currently live in urban areas (see Figure 7).32
Other macroeconomic drivers such as inflation add upwards pressure to losses.

Figure 7
India GDP (USD bn at 2022 prices and FX, LHS) and urban population (millions, RHS)

4 000 600

3 000 450

2 000 300

1 000 150

0 0
2000

2004

2006
2005

2008
2009
2003
2002
2001

2007

2022
2020
1984
1980

1988

1990

2021
1983

1985
1986

1989

1994

1996
1995

1998
1999
1982

1993
1992

2010
1987

2016

2018
2015

2019
1981

1997

2013
2014
1991

2017
2012
2011
GDP Urban population
Source: Swiss Re Institute

Major urban centres can be in the eye of Figure 8 provides indication of the extent of exposure to water inundation (river, coastal
the storm. and flash flooding) of India’s four biggest cities. The high built-up areas overlap with
areas of high and medium flood risk. The figure also shows the tracks of recent cyclones
GDP in USD bn
(Amphan in Kolkata and Vardha in Chennai), which show that these large urban areas
can very much be in the eye of the storm.

Urban Population

32 Data from United Nations and Oxford Economics.

 India’s insurance market: growing fast with ample scope to build resilience
Figure 8
Exposure to floods and cyclones in India’s
four largest cities
Insurance penetration in India is low.
Earthquakes are rare, but the risk is
ever-present...
...and highest in the Himalaya
mountain range.
Swiss Re Institute 13
Chennai Kolkata
Track of
Cyclone
Amphan
Track of
Cyclone
Vardah
Mumbai New Delhi
Yamuna
River
Flood hazard Built-up (year 2020)
Low Medium High Low Medium High
Source: Joint Research Centre, European Commission, Swiss ReCatnet34
With low insurance penetration, the large economic losses inflicted by natural
catastrophes in India are mostly uninsured. The Swiss Re Institute’s Natural Catastrophe
Resilience Index reading for India was 7% in 2022, indicating that 93% of the exposures
remain uninsured. That coverage which exists is mostly limited to major cities, meaning
that sizable insured losses register only when a disaster hits urban areas, as was the case
with the Chennai (2015) and Mumbai (2005) floods.
Earthquake risk in India
Although occurrence of large loss-making events is rare compared to high-risk areas
like Japan, New Zealand, California and Chile, India is exposed to earthquake risk, with
unique challenges. The last major event was the 2001 Bhuj quake in Gujarat but even
so, the risk is ever-present and for the purpose of strengthening resilience, it is prudent
to assess the exposure and potential losses. The need here is to make more high-
quality data available and to improve modelling of the complex risks involved.
Geographically, the risk is highest in the Himalayan mountain range that runs from
Assam in the east (Mw 8.6 earthquake in 1950) to Kashmir in the west (Mw 7.6
earthquake in 2005).34 The range is one of the most seismically active regions in the
world, but the economic risk is low. In terms of economic loss potential, New Delhi,
Mumbai and the states of Gujarat and Maharashtra are most exposed, given high
population and asset value concentrations. Across India, more than 25% of building
stock is exposed to high and very high earthquake risks.35
33 GHS built-up volume grids derived from joint assessment of Sentinel2, Landsat, and global DEM data, multi-
temporal (1975‒2030), Joint Research Centre, European Commission, 2023; and based on Swiss Re’s global
flood zones, global pluvial flood zones and global storm surge zones, proprietary models.
34 sigma 1/2016 - Natural catastrophes and man-made disasters in 2015, Swiss Re.
35 Distribution of Houses by Predominant Materials of Roof and Wall and Level of Damage Risk, Ministry of
Housing and Urban Affairs, Government of India, 2018.
14 Swiss Re Institute India’s insurance market: growing fast with ample scope to build resilience
Exposure growth and inflation
have greatly increased the loss potential
of seismic events.
Better data and models are key to building
earthquake resilience.
Figure 9
Earthquake risk exposure in Mumbai and Delhi
The Bhuj earthquake registered Mw 7.6 and, in terms of losses, was one of the most
devastating events in India over the last few decades. As per sigma records, the quake
caused USD 4 billion in economic losses, of which just USD 100 million were insured,
(in 2001 prices). Over the last two decades, the GDP of the state of Gujarat has grown
by more than 25 times. Primarily owing to the associated growth in exposures and
inflation, we estimate that if the Bhuj earthquake were to occur today, the insured
losses would be 30-times greater than in 2001, upwards of USD 3 billion. According to
Swiss Re’s proprietary model, nationwide a loss potential of this degree has a return
period of around 50 years. Assuming insurance penetration of 7‒10%, the economic
losses would be between USD 30–40 billion.36 There is large uncertainly around this
estimate due to a lack of high-quality data. Exposure data is available at state level
(coarse resolution) only, not at zip code or coordinate level (fine resolution). However, it
is safe to say that losses of this magnitude are not the most severe that an earthquake
in India could impart. For example, the impact from an earthquake with epicentre in the
Himalayas but from which the ripples extend as far as Delhi or, alternatively, a smaller
event with epicentre close to main city like Mumbai or Delhi, could result in losses that
far exceed those that the Bhuj earthquake would generate today.
Figure 9 shows the exposure of urban concentration in Mumbai and Delhi to seismic
hazard. Note that these cities are also exposed to soil liquefaction, which induces
ground deformation and makes buildings and infrastructure more vulnerable to
damage. Delhi is located on the banks of River Yamuna on a bed of very soft soil, and
liquefaction can amplify seismic waves and associated damage potential.37 Similar
liquefaction risk exists in Mumbai because of building on land reclaimed from the sea,
alluvium soil types and large water bodies within city.38 The vulnerability of buildings
adds to the risk. In Delhi alone, around 90% falls under the category of unreinforced
masonry, which is not quake resistant.39 Models need to take the multi-facetted nature
of existing exposures into account to deliver effective underwriting and narrow
protection gaps. Enforcing more stringent building codes would be a first step towards
reducing loss potential.
Mumbai New Delhi
Seismic hazard Built-up (year 2020)
Low Moderate Significant High Very High Low Medium High
Source: European Commission Joint Research Centre, Swiss Re CatNet, Swiss Re Institute
36 Our assumption is based on Swiss Re Institute’s 2022 Natural Catastrophe Resilience Index reading for India
of 7% (see sigma 2/2023 op. cit.). As Bhuj is an industrial state, insurance penetration is likely higher that
the national aggregate.
37 See Delhi Disaster Management Plan (2016-17), Delhi Disaster Management Authority.
38 Soil liquefaction studies at Mumbai city, Natural Hazards, 1 April 2012.
39 According to 2011 census data.
40 Seismic hazard on local soil, calculated based on the GEM 2018 bedrock hazard (available from Global Hazard
Map ‒ Global Earthquake Model), and VS30 from slope from US Geological Survey.
 India’s insurance market: growing fast with ample scope to build resilience Swiss Re Institute 15

Narrowing the natural catastrophe protection gap: challenges

There is a significant natural catastrophe protection gap in India. There are also many
challenges to closing the gap.

̤ Climate change effects can amplify natural catastrophe risks. For example,
the glaciers in the Himalayan region are melting due to rising temperatures. What’s
left behind are lakes dammed by unstable natural materials called moraines. When
moraines destabilise beyond a point, the dams can fail resulting in so-called glacial
lake outburst floods (GLOF). During the Uttarakhand flood in 2013,41 large scale
devastation was caused by the Chorabari GLOF that resulted when intense rainfall in
the area added water volume to the lake.42 Climate change may also exacerbate
floods, tropical cyclones and wildfires.43

̤ Lack of awareness and low perception of risk: According to a recent survey by

Swiss Re, awareness of natural catastrophe risks among property owners in India is
low. Only 16% of surveyed individuals identified quake, fire and damage to home
appliances as risks. Fires are considered more likely to occur and are seen as
potentially inflicting more damage than cyclones or earthquakes.44 Natural
catastrophes, flooding in particular, cause damage to vehicles. For example, the
majority of the insured losses caused by the 2018 floods in Kerala were from damage
to vehicles.45 Motor is the second largest line of business in non-life yet despite robust
growth in motor premiums in recent years, government figures indicate that due to
non-renewals, around half of vehicles in India are not insured.46 Agriculture, the third
largest line of non-life business in India, is also affected by natural perils like floods and
drought. However, the majority of farmers lack awareness about crop insurance or
availability of state subsidies for crop insurance, and hence remain unprotected.47

̤ Poor risk assessment for public sector infrastructure projects. As per a recent
Swiss Re report, often pre-feasibility studies for infrastructure do not include
comprehensive risk assessment, and the criteria for selecting bidders overlook
candidates’ own risk management capabilities.48 Currently, insurance coverage for
infrastructure risks is fragmented and often commoditised. Contractors can arrange
insurance with high deductibles (to obtain premium discounts), potentially leading to
inadequate indemnification at the time of claim.

̤ Underwriting challenges: Insurers face multiple challenges in underwriting. The rare

and extreme nature of natural catastrophe events makes modelling and estimating
risk more challenging. With advancement in scientific understanding of the processes
that drive natural hazards, the sophistication and accuracy of associated models
globally has improved in recent decades. However, model availability and use are still
in development stage in India. Availability of quality data is another major challenge,
with reliable historical data either limited or unavailable. Overall, models and data for
natural catastrophes still do not adequately flow into the insurance value chain.
Further, rapidly growing and changing risk landscapes require more frequent risk
benchmarking and updating of models.

41 “Hazard from Himalayan glacier lake outburst floods”, Proceedings of the National Academy of Sciences
vol. 117, no. 2, 2019.
42 Uttarakhand Disaster 2013, National Institute of Disaster Management, 2014.

43 The recent IPCC 6th assessment report notes that the South Asia region (Indian sub-continent) has high

probability of intensification of coastal flooding (mostly accompanying tropical cyclones) and pluvial flooding,
and medium probability of intensification of river floods, landslides, and fire weather under SSP3 to SSP5
scenarios, Climate Change 2021: The Physical Science Basis, The Intergovernmental Panel on Climate
Change, August 2021.
44 In July 2021, Swiss Re conducted a survey among consumers aged 25 to 54, focusing on their behaviours

and risk perceptions related to their homes, transportation, employment, and lifestyle. See Digital adoption
in personal P&C insurance in south and southeast Asia, Swiss Re Institute, 31 October 2021
45 “Kerala floods: PSU insurers likely to be worst hit as claims touch Rs 2 000 crore”, moneycontrol.com,

24 October 2018.
46 “Despite Compulsion, More Than 50% Vehicles In India Running Without Insurance, Says Govt”, India Times,

21 March 2023.
47 “On Improving Awareness about Crop Insurance in India”, Review of Agrarian Studies, vol. 1, 2019

48 Infrastructure resilience: De-risking transport infrastructure projects in India, Swiss Re Institute, July 2023.
16 Swiss Re Institute India’s insurance market: growing fast with ample scope to build resilience
Adaptation and mitigation are central to
managing catastrophic risks.
Insurance is one tool to strengthen
resilience...
...than can help government to cover the
costs of relief and rehabiliation.
Managing natural catastrophe risks: solutions
The potential human and socio-economic impacts of natural catastrophes are significant.
Managing the risks entail mitigation and also risk transfer solutions. While insurance can
help cushion the financial losses, it is necessary to have risk prevention and reduction
structures in place in the first place.
̤ Early warning systems (EWS) for natural disasters and concurrent preparedness
have proved effective in saving lives. India has made significant improvement. EWS
for tropical cyclone are now in place for 100% of the population exposed to cyclone
risk.49 This has helped save millions of lives and has reduced loss potential in the
agriculture (fisheries), shipping and aviation industries.50 However, with respect to
flood exposures, while about two-thirds of the county’s population is exposed to
extreme inundation risk, only a third is covered by EWS.44 Significant improvement
is needed to cover the entire population with multi-hazard EWS that red flag all
hazards, including floods, droughts, wildfires and heatwaves.
̤ Physical infrastructure. Economic growth and the accumulation of asset values in
urban areas have been the main driver of the increasing losses inflicted by natural
catastrophe. To protect areas of population and asset concentration, it is critical to
build infrastructure that can withstand hazards without frequent need of retrofitting.
For example, structural audits conducted in and around Delhi have found that many
buildings that have been exposed to earthquake shock waves are not structurally
secure51 and need to be demolished.52 Retrofitting homes can also help reduce
vulnerability.53 Simultaneous exposure to natural catastrophe risks needs to be
managed at societal level in urban development plans and by investing in adaptation
measures such as blue-green infrastructure for flooding.
Risk transfer: The insurance industry has traditional solutions to help manage financial
losses that result from natural catastrophes (see Figure 9). For individuals, insurance
provides a financial safety net to cover for losses due to loss of earnings, damage to and/
or destruction of dwellings and other assets. For companies, insurance helps cover both
physical damage and revenue loss due to business interruption. At state level,
re/insurance solutions can support governments in relief and rehabilitation work, in
reinstating crucial services and in the rebuilding of public infrastructure (eg, schools,
hospitals, roads, railways, water supply networks, railways stations, stadiums etc).
Additional efforts are needed to reduce the natural catastrophe protection gap. The
recent development of parametric insurance solutions can help finance state efforts to
re-build affected regions. Similarly, an insurance pool can encourage adoption of risk
transfer solutions. In 2013, the IRDAI and the National Disaster Management Authority
(NDMA) presented an action plan that includes risk transfer solutions applicable to
individuals, businesses, state governments, public utilities and the federal government.54
49 Strengthening India’s Disaster Preparedness with Technology, Council on Energy, Environment and Water,
13 July 2023.
50 Opinion: Early disaster warnings from India Meteorological Department benefit all South Asia, The Third Pole,
28 January 2023.
51 “Residents recount the horror of earthquake, reiterate demolition”, livemint.com, 9 November 2022.
52 DDMA begins demolition of quake-damaged building in east Delhi, Business Standard, 28 May 2015.
53 “Seismic Performance Enhancement of Unreinforced Brick Masonry Buildings by Retrofitting with Reinforced
Concrete Bands: Full Scale Experiments”, Journal of Structural Engineering, vol. 148, 2022.
54 Disaster Relief and Risk Transfer Through Insurance, IRDAI-National Disaster Management Authority,
Government of India, July 2013.
 India’s insurance market: growing fast with ample scope to build resilience Swiss Re Institute 17

Figure 10
Risk transfer solutions to reduce the protection gap

Risk transfer
Who gets affected? How they get affected?
Insurance solutions
 Traditional solutions for public assets:
 Loss of and/or damage to public
buildings, utilities and infrastructure
infrastructure and assets
 Innovative solutions like parametric
 Emergency relief and
Public sector insurance for all direct and indirect effects,
rehabilitation needs
including loss of livelihoods

 Traditional solutions for commercial

 Disruption of revenue
property, business interruption,
generating activities
under-construction units, etc.
 Loss of and/or damage
 Insurance schemes and pools
Businesses/corporate to private assets
to increase insurance penetration

 Traditional solutions for loss of lives

and loss/damage of private assets.
 Loss of lives and livelihoods  Parametric insurance for crop loss
 Loss of and/or damage  Micro insurance distributed via aggregators
to private assets as part of social safety nets
Individuals
 Insurance schemes and pools to increase
insurance penetration

Source: Swiss Re Institute

18 Swiss Re Institute India’s insurance market: growing fast with ample scope to build resilience
Regulatory developments
The vision is insurance for all.
Bima Trinity will make insurance more
accessible and affordable.
The ’use & file’ procedure will help raise
increase penetration.
A RBS framework will assess insurers
based on their risk profile.
The FRBs minimum capital requirement has
been reduced.
Indian insurance industry likely to adopt
IFRS 17 by 1 April 2025.
Insurance for all by 2047: The IRDAI has been working towards expanding the reach of
insurance in India and launched the mission “Insurance for all by 2047” in November
2022. It aims to increase insurance penetration and ensure that every citizen and
enterprise has appropriate insurance cover/solution, and to also make the Indian
insurance sector attractive for foreign investment.55 To achieve this, among others the
IRDAI is working on several initiatives and reforms around improving ease of doing
business, facilitating InsurTech and promoting distribution agility.
Bima Trinity: Bima Sugam, Bima Vahak and Bima Vistaar: The IRDAI launched three
major initiatives – Bima Sugam, Bima Vahak and Bima Vistaar – to raise insurance
penetration, in particular in semi-urban areas, rural towns and villages. “Bima Sugam” is
an online portal to facilitate the buying of insurance, portability facilities, the ability to
change insurance agents and the settling of life, motor and health claims directly with
insurers. “Bima Vahak” is a women-centric insurance distribution channel. “Bima Vistaar”
is a social safety net accessible to all through the Bima Sugam platform. It will bundle life,
health, causality, and property insurance solutions.
Extend “use-and-file” procedure to individual and Group Unit-Linked products:
To provide consumers with more options and increase penetration, the IRDAI has
broadened the application of the “use-and-file” approach in June 2023 to encompass life
insurance products.56 Previously, use and file was applicable to health and general
insurance products only. The change enables insurance companies to introduce new
products upfront and subsequently furnish the required information to the regulator.
Risk-based supervisory (RBS) framework: With a focus on nurturing a principle-
centered regulatory system, encouraging business-friendly approaches and facilitating
proactive recognition and handling of risks, through an RBS framework, the IRDAI will
assess insurers based on their overall risk profile based on certain specified parameters.57
Amendments to reinsurance regulations: The IRDAI approved a series of amendments
to the reinsurance regulations during its 123rd Authority Meeting held in August 2023 to
position India as a global reinsurance hub. Key changes include reducing Foreign
Reinsurance Branches’ (FRB) minimum capital requirement to USD 6.07 million (INR 500
million) from USD 12.15 million (INR 1 000 million), and streamline the regulator’s order
of preference of cession by Indian insurers to reinsurers to four from six levels. Reinsurance
formats have been simplified, and the International Financial Service Centre Insurance
Offices’ (IIOs) framework has been aligned with that of the International Financial Services
Centres Authority (IFSCA) rules for better competitiveness.
New accounting system (IFRS 17 or Ind AS 117): India’s insurance industry is
working towards adoption of IFRS 17 (or Ind AS 117) by 1 April 2025.58 Implementation
is expected to take place in phased manner, with 15 insurers (10 life and 5 non-life) in
the first phase identified based on listing and Asset under Management (AUM) criteria.59
This could transform the insurance segment’s accounting rules, but will not
fundamentally alter insurers’ underlying financial positions as it does not change the risk
structure and economic profitability of underlying operations.60
55 Insuring India by 2047 - New landscape for Insurance Sector, IRDAI, 25 November 2022.
56 The ‘use-and-file’ procedure allows insurers to launch a product first and then provide details to the regulator.
See “IRDAI expands ‘use and file’ procedure to more life products,” The Hindu, 24 June 2023.
57 “IRDAI to roll out first phase of pilot for ‘Risk Based Supervision’ from July”, Financial Express, 28 June 2023.
58 “Top 15 insurance companies to adopt Ind-AS from April 2024”, Financial Express, 7 August 2023.
59 Minutes of Meeting held on 28 th July 2023 at Insurance Institute of India, BKC Mumbai on IFRS17/Ind AS
117 preparedness of General Insurance Industry, GI Council, 2023.
60 New accounting (IFRS-17/9) adoption: Implications to Indian life insurers & equity investors, JP Morgan,
August 2023.
Published by:
Swiss Re Management Ltd
Swiss Re Institute
P.O. Box
8022 Zurich
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Telephone +41 43 285 2551

Email institute@swissre.com

Authors
Dr. Roopali Aggarwal
Dr. Chandan Banerjee
Dr. Mahesh H Puttaiah
Parvinder Singh

Contributors
Alexandra Kälin
Dr. Prabhu M.

Editor
Paul Ronke

Managing editor
Dr Li Xing
Head of Insurance Market Analysis

The editorial deadline for this study was 31 December 2023.

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Swiss Re
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