Indian Government may modify rules to bolster $ 731 billion Insurance sector

15 Jun 2023 , 01:34 PM

Indian may make changes in insurance rules to boost the sector as more companies, including foreigners, seek to enter the space.

‘Proposals for amendments to insurance laws include rationalised capital requirements, composite registration, value-added services by insurers, one-time registration for intermediaries, and sale of other financial products,’ said Debasish Panda, chairman of India’s Insurance Regulatory and Development Authority (IRDA).

Insurance penetration in a country with a population of 1.4 billion remains extremely low, standing at less than 5%. This indicates a significant growth opportunity for investors in the insurance sector.

The country allows foreign investors to own up to 74% of insurers. American International Group Inc. and Prudential Financial Inc. have already established a presence in India through local partners.

According to Panda, four new firms have marked their place in the insurance sector in India over the last year, and a few more are under various stages of enrollment, indicating that the business environment is favourable.

Insurance companies’ assets under management in India have surpassed 60 trillion rupees ($731 billion), which is larger than the economies of many countries, including Poland and Sweden. In the fiscal year that ended in March, the sector grew 13.7%.

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