Summary:

The Indian government has raised the Foreign Direct Investment (FDI) limit in insurance companies from 74% to 100%, allowing full foreign ownership. This move aims to attract more capital into the capital-intensive sector, ensuring that premiums are invested within India. Finance Minister Nirmala Sitharaman has announced that foreign investment regulations will be reviewed and simplified. This aligns with the Insurance Regulatory and Development Authority's goal of achieving 'Insurance for All' by 2047.

Industry analysts believe this regulatory change will help insurers strengthen their financial positions, enhance customer service, and implement global best practices. Mr. Tarun Chugh, MD & CEO of Bajaj Allianz Life Insurance, emphasized that increased foreign participation could drive product innovation and service improvements. India’s insurance penetration fell from 4.2% in FY22 to 3.7% in FY24, significantly lower than the global average of 7%. Experts like Ms. Shailaja Lall view this as a bold step toward boosting FDI and expanding coverage.

Source: IBEF

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