Foreign investment worth Rs 54,000 crore came in insurance sector in nine years: Financial Services Secretary
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New Delhi. Financial Services Secretary Vivek Joshi has said that the insurance sector has received foreign direct investment (FDI) of about Rs 54,000 crore in the last nine years due to more liberalized foreign capital inflow norms. Joshi said that the government had increased the FDI limit in the insurance sector from 26 percent to 49 percent in 2015 and then revised it to 74 percent in 2021. He said that the government had increased the approved FDI limit for insurance intermediary companies to 100 percent in the year 2019. He said that these steps of the government resulted in a total FDI of Rs 53,900 crore in insurance companies between December 2014 and January 2024.
Joshi said that during this period, the number of companies associated with the insurance sector increased from 53 to 70 by January 2024. He said that the penetration of insurance products was 3.9 percent in the financial year 2013-14, which increased to four percent in the financial year 2022-23. At the same time, insurance density increased from US$52 in 2013-14 to US$92 in 2022-23. Insurance penetration is measured as the percentage of insurance premiums to gross domestic product (GDP) while insurance density is calculated as insurance premiums in proportion to the population.
The assets under management of insurance companies almost tripled from Rs 21.07 lakh crore in 2013-14 to Rs 60.04 lakh crore. At the same time, total insurance premium more than doubled to Rs 10.4 lakh crore from Rs 3.94 lakh crore in March 2014. The insurance sector was opened to private players in August, 2000. Whereas foreign companies were allowed ownership up to 26 percent. Since that time many foreign companies have invested in the insurance sector.
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