The Indian government is set to reassess foreign direct investment (FDI) limits in the insurance, defence, and plantation industries, and may also consider streamlining related processes, according to a report by The Economic Times.
Focusing on the insurance industry, the current FDI cap for general and life insurance companies is 74%, with 100% FDI permitted in insurance intermediaries.
Despite the industry’s adequate competition and the profitability of many life insurance companies, a review is being considered, according to The Economic Times.
Officials indicated to The Economic Times that the purpose of this review is to ensure smoother FDI flows and to maintain adherence to inter-ministerial timelines.
In another news from the Indian insurance industry, The Confederation of General Insurance Agents’ Associations of India has been calling on the government to reduce the Goods & Services Tax (GST) on individual health insurance policies from 18% to 5% to encourage more people to buy these insurance policies, ensuring social security.
“The average percentage of renewal of retail health insurance policies is at 65% [to] 75%. From this, it is very much evident that most of the policyholders are not able to pay the premium due to frequent hikes in insurance premiums and very high rate of GST,” the group said in a letter sent to the Union Finance minister.
The Insurance Brokers Association of India (IBAI) also recently teamed up with the Insurance Regulatory and Development Authority of India (IRDAI) to discuss strategies to achieve “insurance for all” by 2047.
The strategies focused on improving insurance awareness, creating innovative insurance products, and improving career opportunities in the industry.
Some of IBAI’s recommendations to drive positive change in the Indian insurance industry includes:
