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.
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.
“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
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.