The increase in FDI limit for the insurance sector from 26% to 49% will attract investors and spur industry growth, Insurance Regulatory and Development Authority (Irda) chairman TS Vijayan said on Wednesday. He said the hike would bring more foreign capital to the industry.
“The insurance sector is attracting a lot of investors even when some companies are posting losses,” he said at the convocation ceremony of the Institute of Insurance and Risk Management (IIRM).
The much-delayed Insurance Bill, which seeks to raise the foreign investment cap in the sector from 26% to 49%, has been referred to the Select Committee of Parliament. A meeting of the committee is scheduled for September 4.
Vijayan said there was a set of good initiatives, such as the sale of insurance products on Common Service Centre platform, but the numbers were not forthcoming, implying the necessity of a marketing drive to make it successful. “The industry has to focus on devising personalised products for people whose income levels are higher while keeping the generic products for entry level customers,” he said.
The insurance industry has witnessed impressive growth with life insurance business growing at 18.42% in the last 14 years. Similarly, the general insurance sector has seen a growth of 16.62%.