Page 26 - WTW Asia Insurance Market Report
P. 26

India 	                                                      Malaysia 	

WTW is supported by Almondz Insurance Brokers in India       The non-life insurance market saw direct premiums
                                                             increase year on year by 0.8% between January and
  The insurance market in India is growing, with a           July 2016 due to new business in the property line.
  number of local and MNC brokers active in this             However, motor insurance remained flat due to lower
  space. In March 2016, the Insurance Regulatory             automobile consumption. The absence of significant
  and Development Authority of India (IRDA) granted          losses, coupled with continued profitable results has
  approval to five foreign reinsurers - Munich Re, SCOR,     caused the local market to become steadily soft and
  Swiss Re, ACR and Hannover – and requested them            attractive to both insurers and reinsurers. Malaysian
  to bring capital of Rs. 5 billion (approximately USD       Re continues to dominate the non-life reinsurance
  73 million) each into the market. Lloyd’s of London        market and benefits from mandatory facultative and
  also received approval to set up a branch in Mumbai        treaty cessions from direct insurers. These cessions
  in 2017, thereby bringing extensive capacity and           were expected to be phased out in 2016, but are likely
  underwriting experience into the market.                   to be postponed to early 2017.

  Terms and conditions in the Property, Casualty and         MAA Takaful Bhd, the third largest general takaful
  Energy areas continue to be highly competitive.            operator, was purchased by Zurich Insurance
  Government business continues to be tendered               Malaysia Bhd in July 2016. In the same month, Ace
  each year and this is dominated by the Public Sector       Jerneh Insurance Bhd changed its name to Chubb
  Undertakings (PSU) in India with strict adherence to       Insurance Malaysia Bhd following the merger of Chubb
  tender compliance. Capacity continues to increase          Corporation and Ace Group.
  and international Fac orders are decided on whether
  business is ceded to treaties or not. The government       A plan for the liberalisation of the fire and motor
  reinsurer GIC has a major role to play in this decision.   insurance market was released by Bank Negara
                                                             Malaysia (BNM) in March 2016. Effective from 1 July
  The proposal to amend the Motor Vehicles Act to limit      2016, insurers and takaful operators were be allowed
  the compensation payable to victims of a road accident,    to offer new, unregulated, products and optional extra
  along with the introduction of a statutory time bar for    cover extensions to existing policies. Furthermore,
  filing claims has been introduced in the parliament. The   from 2017 onwards, motor premium rates for
  bill is now at a fairly advanced stage and can impact the  comprehensive and third party, fire and theft policies
  fortunes of the industry as a whole.                       will no longer be subject to a tariff, paving the way for
                                                             user-based insurance.
  Indian M&A deals experienced a growth of 68.5% in
  the first nine months of 2016, the highest growth since
  2010. This has also been witnessed in the insurance
  industry, as insurers looked to consolidate in order to
  remain profitable. For example, HDFC Life and Max
  Life insurance merged to create the biggest private
  sector insurance company. More deals are expected
  in the coming year.

  The total premium of both the life and non-life
  insurance industry in India is projected to reach Rs. 17
  to 22 lakh crore (approximately USD 250 - 350 billion)
  by 2020, according to a report by Confederation
  of Indian Industry (CII) and KPMG India. Untapped
  household savings will offer new business potential
  for financial services companies. Insurers need to be
  prepared to tap into the opportunities presented by
  record growth in market size, penetration rates and
  new business income that market analysts predict will
  be entering the industry in the coming years..

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