Indian Insurance to Open Market :
Global News about Insurance & Risk India’s Bhartiya Janata Party government, led by prime minister Narendra Modi.
Plans currently in the pipeline would allow foreign companies to hold up to 49% equity in life and non-life insurance companies in India.
Under the proposed reforms, the cap for foreign direct investment in insurance companies would be raised from 26% to 49%.
The Modi government requires the opposition’s support because it lacks the numbers to get the insurance reform bill passed in the upper house.
The insurance changed bill, first set in motion in 2008 by then finance minister P. Chidambaram, has recently been reviewe by a 15-member multiparty select committee headed by BJP member Chandan Mitra.
The committee, which submitt its report in early December, recommended a further opening of the industry to foreign investors.
The BJP clinched an understanding with the Congress Party, its main opposition, on December 6, paving the way .
Insurance Laws (Amendment) Bill 2008 to be passed in the Rajya Sabha, the upper house of the Indian parliament.
The government projects that India’s highly diversify insurance sector will gain up to $8 billion in additional foreign investment because of the reforms.
Several large US & Japanese insurers already have stakes in the evolving sector.
Head of financial services at consulting firm EY India, said in a December 10 interview on Indian financial.
TV channel ET Now that more insurance companies will set up shop in India once the foreign investment limit is raise to 49%.
A few players who were standing there to come in once the 49% clarity comes in.
There may be a couple of players who may be keen to come in some level of consolidation could follow.
India’s underserved insurance sector includes 52 companies, comprising 28 nonlife players & 24 life businesses.
In a recent report, Boston Consulting Group and Google India value the sector at $66.4 billion in 2013.
The BCG-Google report project that the Indian insurance business would be worth $350 billion to $400 billion within seven years.
Indian insurance market growth supported by evolving regulatory regime, says Moody’s
Growth in India’s insurance and reinsurance sectors is continuing to be support by India’s strong economy & evolving regulatory regime, according to Moody’s Investors Service.
The report by Moody’s, titled Insurance India:
Continued Regulatory Evolution is Credit Positive for India’s Insurance Sector, states that robust GDP expansion.
Couple with current low insurance penetration, should support double-digit growth.
The doors to the insurance sector need to be open wider so that large investments could come in.