New Delhi [India], March 18 : The insurance sector has witnessed an influx of Rs 53,900 crore in foreign direct investment (FDI) from December 2014 to January 2024, Financial Services Secretary Vivek Joshi has said.
This comes against the backdrop of the liberalisation of overseas capital flow norms by the government.
The government increased the permissible FDI limit from 26 per cent in 2014 to 49 per cent in 2015 and then to 74 per cent in 2021, he toldin an interview.
However, Joshi informed, the permissible FDI limit for insurance intermediaries was increased to 100 per cent in 2019.
"As a result, Rs 53,900 crore of FDI was received in the insurance companies between December 2014 and January 2024," he said.
The IRDAI (Insurance Regulatory and Development Authority of India (IRDAI) opened up the market in August 2000 with the invitation for application for registration. Foreign companies were allowed ownership of up to 26 per cent.
Since then, several insurance companies in India have attracted foreign direct investment (FDI) to bolster their operations. Private life insurance companies like HDFC Life, ICICI Prudential Life, Max Life, and others have attracted significant FDI over the years.
These companies have established partnerships with foreign insurers, leading to substantial capital infusion.
Since 2014, the secretary said that the number of insurance players increased from 53 to 70 as of January 2024.
Meanwhile, total insurance premium has also increased from Rs 3.94 lakh crore from 2013-14 to Rs 10.4 lakh crore in 2022-23.
Informing further about the impact of reforms in the Insurance sector, Joshi said that the Assets Under Management (AUM) nearly tripled to Rs 60.04 lakh crore as on March 31, 2023 as compared to Rs 21.07 lakh crore in 2013-14, while total insurance premium recorded more than two-fold jump to Rs 10.4 lakh crore from Rs 3.94 lakh crore at the end of March 14.
Meanwhile, insurance penetration increased from 3.9 per cent in 2013-14 to 4 per cent in 2022-23 while insurance density surged from USD 52 in 2013-14 to USD 92 in 2022-23, he said.
Insurance penetration refers to the ratio of premiums underwritten in a given year to the Gross Domestic Product (GDP) of a country. Insurance density means the average amount of premium paid per person in a specific geographical area.
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