India's slowing economy will weigh on insurance premium growth over the next two to three years, according to Moody's.
The country's GDP growth in the fiscal year ended March 2019 slowed to 6.8%, the slowest rate in five years. The economic growth is projected to slow to 4.9% in fiscal 2019 before recovering to 6.3% in fiscal 2020.
Benjamin Serra, a Moody's senior vice president, said the resulting financial pressure on rural households amid weaker job creation is taking a toll on the country's premium growth.
However, a series of supportive measures put in place by the government and regulators will help mitigate the challenging environment for Indian insurance and reinsurance companies, while the country's low insurance penetration rate of 3.7% provides room for further growth in the longer term, Serra noted.