Mubasher: India’s insurance and reinsurance sectors would grow robustly thanks to a strong economy and evolving regulations, Moody’s Investor Service said in a new report.

The Asian nation’s solid real gross domestic product (GDP) expansion, “coupled with the current low insurance penetration, should support double digit growth for the non-life sector over the next three to four years,” the New York-based rating agency added.

During fiscal year 2018, overall gross premiums for the non-life and life insurance segments grew 11.5% to 6.1 trillion Indian rupees (INR) ($94 billion), bringing the 5-year compound annual growth rate (CAGR) to 11%, the report, titled “Insurance -- India: Continued regulatory evolution is credit positive for India's insurance sector.”, said.

“Liberalisation of the reinsurance sector, with the admission of foreign reinsurers since 2017 [as well as] steps to ensure that they can compete with incumbents, will specifically benefit the non-life sector,” the rating agency noted.

Moreover, regulatory reforms would also boost the sector’s capital strength.

The Insurance Regulatory and Development Authority of India (IRDAI) lifted the ceiling on foreign ownership of local insurance companies to 49% from 26%, in a bid to encourage global firms to own holdings in Indian entities.