Emerging markets continued their robust premium growth trend-Swiss Re Sigma study

Life insurance premium growth in Emerging Asia accelerated to 9.9% in 2014 from 3.3% in 2013. In India, premium growth improved from 2013 (-0.2%) but remained weak at 1.0%, reflecting sustained weakness in sales of unit linked products. However, the growth outlook for life premiums in Emerging Asia remains favourable with the passage of the Insurance Laws (Amendment) Bill in India which will lead to further change in the way the industry conducts its business and engages with its customers. It is expected to stimulate the market and also boost consumer confidence in insurers.

On the other hand, continued loose monetary policy in the region will put pressure on the competitiveness of life saving products relative to wealth management products offered by banks.

Recent interest rate cuts in India will put further pressure on insurers' profits, however the insurers are capable of bridging the low interest rate phase by better investment returns from equity investments.

Non-life insurance premiums in Emerging Asia grew by 15% in 2014, slightly higher than the 13% growth achieved in 2013. Emerging markets like India and China were the key contributors to the robust premium growth trend (+8.0%) in year 2014.

Amidst an environment of improving business sentiment and accelerating economic growth, non-life premium growth in India improved modestly to 4.8% in 2014 from 2.4% a year earlier.

Emerging Asia is expected to witness strong growth in the non-life premium owing to solid economic performance and favourable government policies. India armed with pro-growth structural reforms, including increased spending on infrastructure, promises to boost demand for non-life insurance products.

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