Indian Economy News

Insurance sector attracted US$ 6.5 billion (Rs. 54,000 crore) FDI in the last 9 years: Secretary of Department of Financial Services, Dr. Vivek Joshi

  • IBEF
  • March 19, 2024

Over the past nine years, the insurance sector has attracted significant foreign direct investment (FDI) amounting to nearly US$ 6.5 billion (Rs. 54,000 crore), driven by the government's progressive relaxation of overseas capital flow regulations, according to the Secretary of Department of Financial Services, Dr. Vivek Joshi. Starting with a 26% permissible FDI limit in 2014, the government raised it to 49% in 2015 and 74% in 2021. Notably, the FDI limit for insurance intermediaries was elevated to 100% in 2019, resulting in an influx of US$ 6.5 billion (Rs. 53,900 crore) in insurance companies between December 2014 and January 2024. Insurance players surged from 53 to 70 during this period as of January 2024.

He emphasized the positive growth trajectory of the insurance sector, citing an increase in insurance penetration from 3.9% in 2013-14 to 4% in 2022-23, alongside a rise in insurance density from US$ 52 to US$ 92 during the same period. These metrics serve as crucial indicators of the sector's development, with assets under management nearly tripling to US$ 724.4 billion (Rs. 60.04 lakh crore) compared to US$ 254.2 billion (Rs. 21.07 lakh crore) in 2013-14. Since the sector's opening to private players in August 2000, foreign companies have increasingly invested, evidenced by notable deals such as the Zurich Insurance-Kotak General Insurance transaction, which involves Zurich Insurance acquiring a 70% stake in Kotak Mahindra General Insurance for US$ 670.8 million (Rs. 5,560 crore), subject to regulatory approvals from the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (Irdai).

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.