Opportune time to increase insurance FDI to 100%: IRDAI Chairman

In 2021, the move to increase the Foreign Direct Investment (FDI) limit in the insurance sector to 74% from 49% did not garner very strong interest. Except for Zurich Insurance’s decision to acquire a 74% stake in Kotak General Insurance, no other foreign player responded positively despite the 74% FDI limit coming with greater control on the board and decision making of the insurance company.

According to the IRDAI Chairman, Debasish Panda, it is an opportune time to increase the FDI limit in India’s insurance sector to 100%.

“Insurance is a capital intensive sector and to support the strong growth which is expected in the sector, it will require foreign capital,” Panda said, adding that only depending on the domestic capital will lead to a crowding-out effect and hence higher foreign capital would be needed.

Taking the point forward, he said that 100% FDI in insurance sector will bring in global expertise, capacity and technology. The IRDAI Chairman believes that this move will help foreign players plan their business in India independently, decide on their growth plan and the kind of business they want to write and infuse capital promptly without depending on an Indian partner.

Concluding his point, Panda said that Government will take a decision on increasing the FDI limit at an appropriate time.

Also Read : IRDAI identifying insurers poised for IPOs, says Chairman Debasish Panda