India: Growing roots in a growing market

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1 February 2017 | Property

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India: Growing roots in a growing market
On 31 January, 2017 Munich Re opened its first composite branch office in Mumbai. The move makes Munich Re one the first foreign reinsurers to set up shop in India since the amendment of the country’s Insurance Bill in 2015. At the same time, it is a continuation of a business commitment to the country that reaches back to the 1950s.
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The Mumbai branch office, which is dedicated to serving the property & casualty, life and health reinsurance markets across the Indian subcontinent, is part of our strategy to support the insurance industry in one of the world’s most dynamically developing regions. Growing at a rate of around 7.6% (recorded in the 2015-2016 financial year), India’s economy is predicted to become the world’s third-largest by 2020.

Alongside strong and sustained GDP growth, many key facts and figures point to substantial future increases in insurance penetration. India’s economy, which is weighted toward the service sector (56%), and its political environment are stable. Two thirds of its population, currently at 1.29 billion, are below the age of 35. The country’s middle classes are expanding rapidly, fostering robust domestic consumption. In terms of reinsurance opportunities, these factors can be expected to drive growth in the construction, energy, liability and agriculture segments. Munich Re’s Economic Research unit projects more than 9% annual real premium growth in P&C and around 10% in life between now and 2025. 

Expanding horizons

Since 1951, when we wrote our first reinsurance contract in India, Munich Re has been systematically increasing engagement with the country’s different market segments. In addition to reinsurance business with insurers and industrial companies, our ongoing activities include primary insurance (HDFC Ergo joint venture) and health (Apollo Munich Health). Our strong footing in India also allows us to help realise innovative potential. As a market with still low insurance penetration of 3.9% compared to the worldwide average of 6.3% (2013 figures cited by The Times of India), the country offers room to introduce future-oriented concepts and approaches, in line with Munich Re’s strategic focus on innovation.

“The new branch places us in an excellent position to support growth potential and innovation in India’s insurance market”, says Ludger Arnoldussen, member of the Board of Management responsible for Munich Re’s P&C business in Asia-Pacific. “We are well prepared to become a leading reinsurer on the Indian subcontinent.”

Munich Re’s well established expertise in capital management solutions represents a further source of potential, especially in life business. India’s insurers can rely on us for in-depth financial consulting as well as solid capacity. As Joachim Wenning, Munich Re Board member responsible for Life and HR, puts it, “With excellent growth opportunities, India’s life insurance market is an important pillar in our medium-term strategy. Our local presence and expertise, especially in solvency-related solutions, help us to offer individually structured programmes tailored to the needs of our clients and jointly realise the potential of this emerging market.” 

Open for digitalisation

With India’s young demographics and growing middle classes, digital adoption is high. In major cities as well as in smaller urbanised areas and even villages, more and more people use Smartphones and tablets for purposes like purchases, travel bookings, paying bills and connecting with social media. Insurers can turn the currently low level of insurance penetration into an advantage: with an underdeveloped sales infrastructure and comparatively few consumer touchpoints, smart players can enter the digital space to bridge the gap. Here, the widely accepted channels of communication can be leveraged to generate greater trust, awareness and dialogue. As the insurance market matures, digital presence is expected to remain a pivotal success factor for the foreseeable future.  

Munich Re’s global experience in digitalisation coupled with the strategic focus on innovation make us an ideal partner for companies seeking to take advantage of the digital revolution. The experts in Mumbai can provide in-depth consulting coupled substantial capacity and backed by international best practices.

The dynamically developing insurance market on the Indian subcontinent continues to present new challenges and opportunities. A look at the country’s growing industries and expanding middle classes reveals a real need for high-quality risk solutions. Life and health covers as well as products to protect private and commercial assets from risks like natural catastrophes can support the long-term wellbeing of India’s economy and society. In this regard, the insurance community has a key role to play in the country’s future, and we at Munich Re are there to contribute.


Chief Executive Officer of Munich Re India Branch, Hitesh Kotak, talks about the Indian market and his expectations for the future.

Our Expert
Hitesh Kotak, Chief Executive Officer of Munich Re India Branch

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