Life insurance industry, which witnessed a subdued growth in 2014, is expected to get a boost this year on the back of passage of the insurance legislation.
"In emerging Asia, the life insurance premium surged to 9.9 per cent in 2014 from 3.3 per cent in 2013, whereas in India, life insurance premium growth improved from 2013 (–0.2 per cent) but remained weak at 1 per cent, reflecting sustained weakness in sales of unit-linked products," said a global report on World Insurance in 2014 by Swiss Re Sigma.
Life premiums in emerging Asia will remain favourable with the passage of the Insurance Laws (Amendment) Bill in India, which will lead to further changes in the way the industry conducts business and engages with customers, it said.
It is expected to stimulate the market and also boost consumer confidence in insurers, the report said.
Insurance Laws Amendment Act allows foreign insurance players to raise their stake in Indian joint ventures to 49 per cent from the earlier ceiling of 26 per cent.
On the other hand, it said that continued easy monetary policy in the region will put pressure on the competitiveness of life saving products relative to wealth management products offered by banks.
Recent interest rate cuts in India will put further pressure on insurers' profits, however, the insurers are capable of bridging the low interest rate phase by better investment returns from equity investments.
Meanwhile, non-life insurance premiums in emerging Asia grew by 15 per cent in 2014, slightly higher than the 13 per cent growth achieved in 2013, it said.
Emerging markets like India and China were the key contributors to the robust premium growth trend (over 8 per cent) in 2014.
It said in an environment of improving business sentiment and accelerating economic growth, non-life premium growth in India improved modestly to 4.8 per cent in 2014 from 2.4 per cent a year earlier.
India, armed with pro-growth structural reforms, including increased spending on infrastructure, promises to boost demand for non-life insurance products.
Giving a global overview, the report said that insurance industry gained momentum last year, even though the economic environment improved only marginally.
Total direct premiums written were up 3.7 per cent to USD 4,778 billion after having stagnated the previous year, globally.
The life sector returned to positive growth, with premiums up 4.3 per cent after a 1.8 per cent decline in 2013, and non-life premium growth accelerated to 2.9 per cent from 2.7 per cent.
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