India’s diversified financial sector is undergoing expansion, both in terms of growth of the existing financial institutions and new entities entering the market. The sector comprises of commercial banks, insurance companies, non-banking financial companies, mutual funds, pensions funds and other smaller financial entities. India’s financial sector has been dominated both by the banking and the insurance companies. India’s insurance sector has evolved from its fundamental role of providing basic protection against risks to becoming a key pillar to support India’s rise to economic prosperity and growth, providing funds for nation building projects and driving social security. According to the report ‘World Insurance in 2015’ created by Swiss Re, the reinsurance major, the global GDP grew by 2.5% in 2015 which in turnmoderated the growth of global re/insurance industry in 2015. As per the report, the real global direct life and non-life insurance premiums written grew by 3.8% in 2015, up from 3.5% in 2014. However in nominal US dollar terms, due to wide spread currency depreciation against USD, premiums were down by 4.2% compared to the last year. In 2015, the global life premium stood at US $2,533.8 bn compared to US $2,665 bn in the previous year, recording a growth of 4% in 2015 as compared to the growth of 4.3% in 2014. The global non-life premium stood at US $2,019 bn in 2015 as compared to US 2,123.7 bn in 2014, recording a record of 3.6% in 2015 compared to 2.4% in the earlier year. A comparison of the premium growth in advanced and emerging economies point out that, emerging economies witnesses a healthy growth in premium compared to that in advanced economies. In the life insurance segment, premium growth in the advanced economies slowed down to 2.5% compared to 3.8% in the previous year, while that in the emerging economies grew by 12% compared the previous year. Under the non-life insurance segment, premiums in the advanced economies grew by 2.6% in 2015 compared to 1.1% in the previous year, while the premiums in the emerging economies grew by 7.8% as compared to 8.6% in 2014.
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