In the life insurance segment, there is a noticeable shift towards protection and guaranteed return savings products, which now cover 40 per cent of households, largely due to LIC’s extensive network.
New Delhi: The Economic Survey presented by finance minister Nirmala Sitharaman on Friday, has said evolving customer expectations and emerging risks, such as climate change and geopolitical uncertainty, present significant challenges for insurers.
Besides the insurance industry must address and manage concerns related to misselling, delayed claims settlements, AI, cybersecurity, and third-party interactions, said the Economic Survey.
Additionally, increasing life expectancy and a growing elderly population pose underwriting risks related to longevity and highlight the widening pension gapadded the survey.
Non-financial risks have gained importance alongside traditional financial risks and a clear and quantitative understanding of risk appetite is essential for effective risk management suggested the Economic Survey.
In the life insurance segment, there is a noticeable shift towards protection and guaranteed return savings products, which now cover 40 per cent of households, largely due to LIC’s extensive network.
According to the Economic Survey, the non-life insurance sector is expected to double its premium-to GDP ratio over the next two decades.
However, it will remain below the global average.
The Swiss Re Institute has projected India’s insurance sector to grow at a rate
of 11.1 per cent and is expected to become the fastest-growing market among the G20
nations over the next five years (2024-2028). An expanding middle class, technological
advancements, and supportive regulatory measures will likely drive this growth.
The changing macroeconomic environment, climate fluctuations, technological progress, and evolving customer preferences drive transformation in technology, infrastructure, business models, and organisational culture within the insurance industry pointed out the survey.
Global insurers are actively adopting innovative technologies, expanding their market reach, and prioritising customer-centric approaches to improve efficiency and address emerging demands.