One common theme running through (re)insurance industry gatherings since Monte Carlo 2023 has been that this is ‘India’s time’.
Most industry players with a global presence are looking at India as the newest growth market. As AXA XL Reinsurance chief executive officer Renaud Guidée says later in this issue: “India is a beneficiary of the tectonic shifts that we are seeing in the world economy, especially in terms of capital flows, investment, supply-chain reconfiguration.”
It’s not just the insurance sector getting excited about India. Apple, the world’s most valuable company, has indicated that it wants to get batteries for the latest generation of iPhones from India.
While many of the world’s largest (re)insurance players have been monitoring the Indian market – and many have been active there for many years – now everything is coming together to make the potential a reality.
In part this is because the other giant Asian market – China – is coming off the boil with Moody’s cutting China’s sovereign credit rating to negative because of flagging growth and the slow implosion of the real estate sector.
The number of Chinese blacklisted for missing repayments on mortgages, business loans and other borrowing facilities has topped 8.5m – while China’s state health insurance system lost 19m people in 2022 and seems to be continuing on the way down as cash-starved workers cancel cover in cost-cutting drives.
In 2023, India is the world’s fastest-growing big economy – with the IMF tipping India to grow 6.3% this year compared to 5% for China. All eyes are turning to India for the next big thing in insurance.
A look at the economic losses from the recent Chennai floods caused by cyclone Michaung compared to the insured losses may serve to tell a tale about the potential and scope for closing some of the protection gaps in the country and simply selling more insurance.
Some of the gloss that the India story has accumulated throughout the course of 2023 looked like it could be worn off as newspaper headlines told of stories of the US federal prosecutors accusing Indian officials of being complicit in a plot to kill a Sikh separatist in New York City.
A single such a story might have blown over if it hadn’t come hard on the heels of Canada prime minister Justin Trudeau publicly stating in September that there were ‘credible allegations’ that India’s government was linked to the murder in June of a Sikh leader in Vancouver.
Few business leaders are keen to see the world of politics encroach on the world of commerce – but the reality is that every CEO of every sizeable business has to spend increasing time focusing on the way their company is perceived through an ESG lens. The hint of extra-judicial killings does not play well when viewed through such a lens.
On a more positive note, this month sees another iteration of Asia Insurance Review’s India Rendezvous with the theme of ‘Towards Reinsurance 2030’. Held, as usual, at the Taj Lands End, Mumbai on 17-19 January 2024.
The numbers of overseas delegates booked to attend the event are already well ahead of previous years – and the reasons are not hard to spot. India is on the cusp of perhaps the single biggest development spurt that it has ever seen.
Playing on the global stage means playing by global rules – and that can only be in India’s own best interests in the long run.
Paul McNamara
Editorial director
Asia Insurance Review