A new report from A.M. Best, a global insurance rating company, shows that the insurance market of India is poised for major growth. This potential for growth is, however, offset significant challenges facing the insurance industry. The report, titled “Growth Anticipated for Indian Insurers, But Frustrations Remain”, indicates that the nation’s insurance industry will benefit from a growing middle class and economic growth in numerous industries. The report also highlights the shortcomings of the nation’s auto insurance market, which has become quite volatile as more people have begun driving.
The report notes that part of the reason the Indian insurance market is expected to grow is because of its attractiveness to foreign insurers. These insurers face their own problems, of course, many of which come in the form of regulations from the government. Native insurers are wrangling with an inefficient regulatory system for the auto insurance sector. Like other auto markets throughout the world, India’s market is wrought with fraud and financial liability.
A.M. Best expects to see an increase in foreign investments by as much as 49% in the next few years. These investments will help embolden the insurance market and open up yet more opportunities for foreign insurance companies looking to do business in the country. If insurers can find a way to overcome the challenges they face in the market, they can expect to see significant gains in the near future.