Insurance sector in India has attracted over 540 million dollar of FDI and is poised for tremendous expansion said Shri Pawan Kumar Bansal, the Minister of State for Finance while addressing a meeting of Insurance Australia Group on 21st September 2007 in Sydney.
Banks also have entered the insurance sector in the form of corporate agencies or under referral arrangements to utilize the extensive and broad reach for marketing of insurance products.
The private companies have created a niche for themselves, he said, adding they have been able to increase their share in the insurance market in competition with their counterparts in the public sector. As per the current regulation, foreign entity is allowed equity upto 26 percent in the sector.
The growth seen in insurance sector has been significant, and the sector has a great potential to unfold and create many opportunities and services. India ranks 78th in terms of insurance density and 54th in terms of insurance penetration. The world averages are US $ 469.6 in terms of insurance density and 8.06% in terms of insurance penetration. Against this, insurance density was US$ 19.70 and insurance penetration was 3.17% in India for the year 2003. However, these two indices have increased following the opening of this sector.
Insurance Regulatory and Development Authority has granted registration to 37 insurance companies, which include 17 life insurance (including on PSU), 19 non-life insurance (including four PSU, one AICL & one ECGC) companies and one re-insurance company. At present seventeen insurance companies are operating in the general insurance side and seventeen insurance companies on the life side.
IRDA has also notified Micro Insurance regulations facilitating insurers to tap the potential of rural markets. As per these regulations like Non-Government Organizations (NGO), Micro Finance Institutions (MFI) and Self Help Groups (SHG) have been recognized as micro insurance agents. It is envisaged that micro insurance would facilitate penetration of insurance to rural and remote areas. He said that Micro Insurance being an integral part of overall insurance system, attempts to offer the target specific insurance products at a relatively lower cost, for a lower coverage of amount.
Promoting the insurance sector, Bansal said that India offers a stable investment climate as well as a huge market with a growing middle class. A.T. Kearney in 'The FDI Confidence Index 2005' has ranked India as the 2nd most attractive investment destination just behind China whereas 'World Investment Report, 2005' ranked India as the 2nd most attractive investment destination among Transnational Corporations, he added.
Banks also have entered the insurance sector in the form of corporate agencies or under referral arrangements to utilize the extensive and broad reach for marketing of insurance products.
The private companies have created a niche for themselves, he said, adding they have been able to increase their share in the insurance market in competition with their counterparts in the public sector. As per the current regulation, foreign entity is allowed equity upto 26 percent in the sector.
The growth seen in insurance sector has been significant, and the sector has a great potential to unfold and create many opportunities and services. India ranks 78th in terms of insurance density and 54th in terms of insurance penetration. The world averages are US $ 469.6 in terms of insurance density and 8.06% in terms of insurance penetration. Against this, insurance density was US$ 19.70 and insurance penetration was 3.17% in India for the year 2003. However, these two indices have increased following the opening of this sector.
Insurance Regulatory and Development Authority has granted registration to 37 insurance companies, which include 17 life insurance (including on PSU), 19 non-life insurance (including four PSU, one AICL & one ECGC) companies and one re-insurance company. At present seventeen insurance companies are operating in the general insurance side and seventeen insurance companies on the life side.
IRDA has also notified Micro Insurance regulations facilitating insurers to tap the potential of rural markets. As per these regulations like Non-Government Organizations (NGO), Micro Finance Institutions (MFI) and Self Help Groups (SHG) have been recognized as micro insurance agents. It is envisaged that micro insurance would facilitate penetration of insurance to rural and remote areas. He said that Micro Insurance being an integral part of overall insurance system, attempts to offer the target specific insurance products at a relatively lower cost, for a lower coverage of amount.
Promoting the insurance sector, Bansal said that India offers a stable investment climate as well as a huge market with a growing middle class. A.T. Kearney in 'The FDI Confidence Index 2005' has ranked India as the 2nd most attractive investment destination just behind China whereas 'World Investment Report, 2005' ranked India as the 2nd most attractive investment destination among Transnational Corporations, he added.
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