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The passage of the long pending Insurance Laws (Amendment) Bill that hiked foreign direct investment (FDI) in the sector to 49 per cent (from 26 per cent) is likely to bring in new players and fresh investments into the insurance sector. The bill should also be beneficial for policyholders and help in increasing penetration of insurance in the Indian market.
Arijit Basu, MD & CEO, SBI Life insurance, said, “The primary aspect of the insurance bill is that it is investor friendly -- it provides benefits to the policy holder and gives enough empowerment to the regulating bodies. The bill not only assures the inflow of adequate capital in a capital intensive sector like ours but also safeguards the interest of the Indian partners as management control will rest with them.”
“Increased FDI will boost the confidence of Indian consumers and investors and the sector could see accelerated growth by 20 – 25 per cent in the next 2- 3 years,” he added.
Chanda Kochhar, MD and CEO, ICICI Bank said that it signals the commitment of the government to reform and attracting global capital to support India's growth.
Amitabh Chaudhry, MD & CEO, HDFC Life said the bill will provide a fillip to growth of the sector. “We expect the bill to lead to a progressive regulatory framework and also provide much needed capital for infrastructure development.”
Munish Sharda, Managing Director & CEO, Future Generali Life Insurance said the bill will give more powers to the regulator which will enable them not only to regulate better but also empower them to make decisions in the favour of long term development of the industry. “We believe this bill will be beneficial for policyholders and help in increasing penetration of insurance. We believe increase in FDI will enable product innovation, enhanced customer engagement and service delivery, highest standards of corporate governance norms.” He added that Generali will increase its stake in the JVs in line post discussions with the JV partners.
Khaitan and Co. Law firm said it expects foreign shareholders to increase their stake in Indian insurance companies. “This should see entry of new players in the Indian insurance sector and interest from global private equity funds, sovereign wealth funds and other institutional investors,” it said.
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