SUBSCRIBE NEWSLETTER
  • Change Language
  • English
  • Hindi
  • Marathi
  • Gujarati
  • Punjabi
  • Tamil
  • Telugu
  • Bengali
  • Insurance Finance Minister: FDI in Insurance to increase to 100%

    Finance Minister: FDI in Insurance to increase to 100%

    What does the industry have to say?
    Team Cafemutual Feb 4, 2025

    Listen to this article

    In the Union Budget speech today, it was announced that the government has increased the Foreign Direct Investment (FDI) limit in the insurance sector from 74% to 100%. This step is expected to bring more investment, global expertise, and better products for customers.

    But what do the top minds in the insurance industry have to say?

    Balamurugan Shanmugam, Chief Investment Officer, Aviva India, said that this move will bring more players and capital into the sector, citing growth after the previous limit increase in 2021. "This is expected to bring in more players and more capital from existing players, supporting IRDAI’s vision of ‘Insurance for all by 2047.’ In addition to bringing in much-needed FDI into the country, this will also bring in better technical capabilities and new propositions for the overall benefit of customers. As the economic survey pointed out, out of the total FDI received in Apr-Sep’24 period, 12% came into the insurance sector. This was a result of the previous increase in FDI limit from 49% to 74% in 2021."

    Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance, emphasized the need for more players in the sector. "In many developed economies, thousands of insurance companies operate to serve their citizens. For India, achieving deeper insurance penetration requires a significant expansion in the number of players. With the move to allow 100% FDI in insurance, we could see India moving towards a future with 1,000 insurers in the next decade. A larger number of players will bring greater competition, leading to enhanced innovation, customer-centric products, and improved service delivery."

    Anand Roy, MD & CEO of Star Health & Allied Insurance, called it a welcome move. "The 100% FDI allowance in insurance will attract global capital, enhance competitiveness and efficiencies, and help expand insurance coverage in India where penetration remains below 5%. This aligns with IRDAI's vision of ‘Insurance for All by 2047’ and demonstrates the government’s commitment to financial inclusion."

    Sumit Bohra, President, Insurance Brokers Association of India (IBAI), highlighted the benefits for brokers and underwriting capacity. "The announcement of enhancement in FDI limit in the insurance sector to 100% in the Union Budget 2025 is a positive move. This will now help to attract more foreign capital, enhance underwriting capacity, and foster innovation through global partnerships."

    Satishwar B., MD & CEO, Bandhan Life Insurance, pointed out the broader economic impact. "The Union Budget 2025 introduces significant reforms, particularly with FDI in insurance raised to 100%. India, with its rapidly growing economy and middle class, offers immense opportunities for global investors. This move will attract capital and expertise, boosting market competitiveness, driving innovation, and offering consumers more choices. The provision that this enhanced limit applies only to companies investing the entire premium in India further encourages domestic investment, strengthening India’s position as a global investment hub while ensuring long-term sector sustainability. We are optimistic that this move will pave the way for a financially secure Viksit Bharat."

    Have a query or a doubt?
    Need a clarification or more information on an issue?
    Cafemutual welcomes all mutual fund and insurance related questions. So write in to us at newsdesk@cafemutual.com

    Click to clap
    Disclaimer: Cafemutual is an industry platform of mutual fund professionals. Our visitors are requested to maintain the decorum of the platform when expressing their thoughts and commenting on articles. Viewers are advised to refrain from making defamatory allegations against individuals. Those making abusive language or defamatory allegations will be blocked from accessing the web site.
    0 Comment
    Be the first to comment.
    Login or Sign up to post comments.
    More than 2,07,000 of your industry peers are staying on top of their game by receiving daily tips, ideas and articles on growth strategies. Join them and stay updated by subscribing to Cafemutual newsletters.

    Fill in the below details or write to newsdesk@cafemutual.com and subscribe to Cafemutual Newsletter now.
    Cafemutual is an independent media platform and focuses on providing knowledge and information for the benefit of finance professionals. We do not promote any particular brand or asset category.