Page 35 - Insurance Times March 2021
P. 35

FDI LIMIT HIKE




         IN INDIAN




         INSURANCE





         INDUSTRY:  AN




         ASSESSMENT












         Introduction                                         life segment grew by 16% and now strives to tap the huge
                                                              potential opportunities. This impressive growth has driven by
         In the last couple of years, Government of India has taken
         several initiatives to increase the insurance penetration and  entry of new players with significant growth aspirations and
                                                              capital commitments, which is noticeable in terms of products,
         density in the country. Some of the major initiatives include,
                                                              policies, and premium collections. Despite the strong growth,
         increase in FDI limit, accidental insurance benefits to PMJDY
                                                              the Indian insurance industry faces some difficulties like capital
         Accounts, insurance at a nominal price under Jan Suraksha
                                                              raising, tight regulations, and mis-selling etc.
         Scheme, free health insurance under Ayushman Bharatand
         travel insurance to railway passengers etc. All these  Assessment of Indian Insurance Sector
         schemes have helped in spreading awareness about
         insurance, especially in the rural landscape.        In 2000, Indian insurance sector was opened for private
                                                              players and several global players had entered the market
         With increased awareness coupled with Government's policy  through joint venture with Indian peers. In the last 20 years,
         support, the Indian insurance sector has continued to grow at  these companies have explored many new distribution
         a higher pace, compared to other financial sectors in the  channels, have done product innovations to boost business.
         economy. During the period 2000-01 to 2019-20, the life  However, due to the nature of this business, the sector
         insurance business registered a CAGR growth of 16% in total  needs more capital for growth and regulatory needs.
         premium & 19% in new business premium collections and non-
                                                              The Covid-19 pandemic has shown that further penetration
                        About the author                      of insurance in India is needed, and for that capital infusion
                                                              is required. However, the Indian promotors are not able to
           Dr. Tapas Kumar Parida                             invest further capital in the sector. Further, some insurers
           Sr. Economist, Economic Research Department        need fresh capital infusion to meet the regulatory solvency
           State Bank of India, Mumbai
                                                              margins.In this circumstance, the need of the hour is to

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