India to become sixth largest insurance market in the world in the next 10 years supported by regulatory push and rapid economic expansion, a report said.

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Total insurance premiums in India will grow by an average 14 per cent per annum in nominal local currency terms over the next decade, making India the 6th largest in terms of total premium volume by 2032 from 10th largest in 2021, Swiss Re Institute said in its report.

With regard to Indian life insurance industry, the report said it will grow at an exceptional rate of 6.6 per cent (in real terms) in 2022 and further grow at 7.1 per cent in 2023.

Considering the projected growth rate, the life insurance premiums in India are set to cross USD 100 billion for the first time in 2022, it said.

As far as non-life insurance market is concerned, the report said it has returned to a growth of 5.8 per cent (in real terms) in 2021 after a slight contraction in 2020.

"The growth will slow down slightly in 2022 to 4.5 per cent, mainly due to high inflation. However, the sector is further expected to witness a growth of close to 8 per cent Compounded Annual Growth Rate (CAGR) between 2023 and 2032," it said.

One of the driving factors for the sectoral growth is the systematic change into India's non-life insurance sector brought by the pandemic.

It resulted in a greater risk awareness leading to higher demands in health insurance, making it the biggest Line of Business (LoB) by premium volume in 2021.

The report said, the global economy is on the brink of inflationary recessions, with policymakers facing an increasingly difficult inflation-growth trade off.

Swiss Re expects India to reign as the world's fastest-growing economy in 2022.

Inflation and monetary policy tightening are driving long-term sovereign bond yields higher, with markets pricing in both higher real yields and inflation expectations, it said, adding, insurers will, over time, benefit from higher investment returns that will help offset the higher claims cost.

Swiss Re projected over USD 7 trillion global premiums by end of 2022. It expects the stalling of premium growth in the global insurance markets this year, and a stronger, but still below-trend in 2023.