India is considering modifying its insurance laws to encourage a greater number of companies, including international firms, to enter the insurance sector and boost insurance penetration within the country, states a media report.
What Happened? Per a Bloomberg report, Debasish Panda, the chairman of the Insurance Regulatory and Development Authority of India, conveyed that the proposed amendments include simplified capital requirements, single-time registration for intermediaries, and insurers offering value-added services and selling other financial products.
In India, a country with a population of 1.4 billion, insurance penetration is strikingly low at under 5%, indicating a substantial growth opportunity for investors. The country permits foreign investors to own up to a 74% stake in insurance firms, and global companies like American International Group and Prudential Financial have already established their presence through local partnerships.
Four new companies entered India’s insurance sector in the past year, and several more are currently enrolling. These developments suggest a favourable business environment, according to Panda.
Insurance companies in India have amassed assets under management exceeding $731 billion or just over ₹60 lakh crore, which is larger than many nations’ economies, including Poland and Sweden. The sector experienced 13.7% growth in the fiscal year ending in March.
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Panda highlighted the opportunities provided by a growing middle class, a young population, increasing disposable incomes, and extensive technology use. He further noted the need for greater technical capabilities, expertise, technology, and capital in the sector.
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