There was a marginal improvement in India's insurance penetration in FY21, showed latest data from Swiss Re sigma report.
Insurance penetration (premiums as a percentage of gross domestic product) stood at 4.2 percent in FY21 compared to 3.76 percent a year ago, as per the Swiss Re sigma world insurance report.
Life insurance penetration was 3.2 percent while non-life touched the magic figure of 1 percent in FY21. A year ago, it was 2.82 percent for life and 0.94 percent for non-life.
The world average for insurance penetration was 7.4 percent. Here, life penetration was 3.3 percent and non-life was 4.1 percent for FY21.
Insurance density which is premium per capita stood at USD 78 for FY21. The world average was $809 for insurance density during that period.
Swiss Re conducted surveys in key Asia Pacific markets in 2020 and 2021 to better understand how the pandemic experience has changed consumer behaviour. The latest survey in 2021 finds that many respondents feel under-insured, despite most owning medical and life insurance.
About 30‒40 percent of the respondents purchased additional life and health insurance during the crisis, and 25-50 percent still intend to purchase new policies.
The intent was higher in emerging Asia (56 percent), particularly India, Vietnam and China (~70 percent) versus advanced Asia (with an average of 20 percent).
COVID-19 led impact
The Swiss re sigma report said that the world economy will bounce back more strongly in 2021 as COVID-19 vaccines allow economies to reopen.
"Unprecedented fiscal stimulus, including direct transfers to households and businesses, is boosting GDP growth, but also firming the inflation environment. Insurance demand is benefiting from this growth momentum, but inflation brings growing concerns," the report said.
After contracting 3.7 percent in 2020, we forecast the global economy to grow 5.8 percent in 2021, the report added. Swiss Re sigma said that two factors are causing countries' recoveries to diverge, access to vaccines, which is enabling economies to reopen faster; and the extent of fiscal support.
The sigma report also said that the new developments in the pandemic could still slow global growth momentum.
"There is considerable uncertainty about whether countries' vaccination rates will be sufficient to stop virus spread as new variants emerge. The Delta variant, first identified in India, is the most transmissible so far and now reported in more than 80 countries worldwide," it added.
Going forward, Swiss Re sigma said that the robustness of individual countries' immediate recoveries will set the tone of growth for the rest of the decade, highlighting policymakers' limited room for error.