With great pleasure I present to you the highlights of your Company's performanceduring the financial year 2016-17. As detailed in the annual report your Companycontinues to tread the path of sustained growth.
Your Company has completed a successful year in terms of operational excellence andfinancial growth. It has performed well compared to industry despite challenges andcompetition. This result could only be achieved because of dedicated efforts thoughtfulstrategies and technological intervention. Our approach towards enhancing customerexperience and adapting to changing market dynamics has added to the resilience of theCompany. We are proud of our achievements and I would like to thank and congratulate allthe stakeholders who have played a part in this journey. I am confident that we willcontinue to perform well in coming years.
Global economy stagnated in 2016 with GDP growth of 3.1% as per the latest IMFestimates. Economic activity in advanced economies eased moderately compared to theprevious year with sluggish performance by the US being the major contributor. Meanwhileemerging economies performed relatively better.
The positive is that the modest pick-up in economic activity which began in the secondhalf of 2016 is gaining momentum this year. Japan recovered during the first quarter ofthis year against the back drop of strong exports and investments related to the Tokyo2020 Olympics. Meanwhile decline in unemployment and improving dynamics of factory outputsuggests Euro area is also gaining momentum. Even the US economy is expected to improvewith the possibility of a fiscal stimulus. Overall growth in advanced economies isprojected to come in at 2% in 2017. Meanwhile the emerging and developing world isexpected to grow at a healthy 4.5% in 2017 with major support coming from recovery inRussia and Brazil coupled with resilient India and to some extent China. Nonethelessrising protectionist policies oil price dynamics geopolitical tensions represent thedownside risks to growth outlook.
Against this backdrop India's real Gross Value Added (GVA) growth is projected to risefrom 6.6% in FY 2017 to 7.3% in FY 2018 as per RBI estimates. However with faster paceof remonetisation and forecast of normal monsoon by the Indian Meteorological Departmenteconomic activity is going to further recover in the ongoing fiscal. Furthermoreperformance on the external front continues to improve with positive export growthperformance since September 2016. The current account deficit is expected to narrow downto less than 1% in FY 2017. Going forward though recovery in oil prices is likely to putsome pressure on external balance CAD is expected to remain range bound between 1-1.4%of GDP.
After demonetisation in FY 2017 the Indian economy is witnessing another major reformin the form of implementation of GST in FY 2018 which is going to provide a boost to theeconomy as a whole.
The insurance industry in the country is expected to grow in the coming years due torising financial literacy and government initiatives. The lower level of penetrationfavourable demography initiatives for enhancing financial inclusion rising financialliteracy along with increase in domestic savings consequent upon rise in per capita incomeare expected to support the growth of insurance.
Indian life insurance has been a highly underserved and under penetrated industry.Although we have the highest number of active policies in the world we still lag behindcompared to other similar sized economies. The regulator IRDAI is working hard to developregulations which promote a simpler system for the consumers and encouraging the insurersto design products which are more beneficial and attractive to the consumers. Theseregulatory actions are enabling more transparent and consistent business practices to helpbuild trust for insurance products among the public. It is important for the industry tocreate and communicate the value of insurance products so that more customers can beattracted resulting in development and sustainable growth of the industry.
The regulator has released a number of guidelines regulations and other exposuredrafts during the current financial year. Regulations on Indian Owned and ControlExpenses of Management Commission or remuneration to insurance agent and insuranceintermediaries Appointed Actuary Actuarial Report and Abstract & Assets Liabilities& Solvency Margin of Life Insurance Business Issuance of e-Insurance PoliciesGuidelines on Corporate Governance Insurance e-commerce Operationalisation of CentralKYC Registry (CYCR) and convergence to the Indian Accounting Standards (Ind AS) have beenthe key highlights during the reporting period. Additionally regulations on issuance ofe-Insurance Policies and guidelines on insurance e-commerce have positioned India as atechnology thought leader on the world atlas.
Insurance has a vital role to play in protecting public wealth mobilising savings forefficient use and stabilising the financial markets. Recent reports predict that India'sinsurance penetration will cross the level of 5% by 2020. At a global level lifeinsurance industry grew to US$ 27.5 billion in FY 2016.
Carrying forward the lineage of SBI and BNP Paribas Cardif S.A. we at SBI Life takethe onus to further our customers' interest build a stronger relationship with them andbe diligent in our conduct in the times to come. We believe our strategies will enable usto be in compliance with regulations improve our performance in customer satisfaction andtrust and allow us to create value for all the stakeholders. Our endeavour is to create astronger digital connect expand our product portfolio to meet the changing needs of ourcustomers and add value to their association. We have a dedicated workforce and supportfrom two of the leading financial companies in State Bank of India and BNP Paribas CardifS.A.
I would like to thank all our stakeholders for their continued faith in this Companyand in our strength and capabilities. I would like to thank our customers for theirvaluable trust employees for their dedication and hard work towards achieving our goalsand our shareholders and Board of Directors for their continued guidance and support. Ionce again congratulate everyone for the strong performance this year.