the industry may not be enough to match the ambitions of the government. Its proposal to raise the FDI cap in the insurance sector to 49% from 26% is a welcome move. Urgent actions are also warranted to handhold this industry to play its legitimate role in the economy. The regulatory environment has to be such that the insurers reach out to potential customers rapidly with appropriate products for different market segments.
Currently, several life insurers are struggling in the market with very few products. Even the market leader LICís basket contains not more than 10 products against its earlier offering of 56. For boosting business growth and creating higher awareness about insurance products, genuine time bound initiatives are warranted.
The regulatory mechanism was created to dismantle the Licence Raj, but surprisingly, the purpose has not been accomplished as expected. Restrictions on investment can also be rationalised in line with recommendations of the GN Bajpai committee report for freeing substantial insurance and pension fund for investment in infrastructure.
The writer is former MD & CEO, StarUnionDai-ichi Life