Arete Consultants

The insurance sector has received close to Rs 54,000 crore as foreign direct investment (FDI) in the last 9 years on the back of further liberalisation of overseas capital flow norms by the government, Financial Services Secretary Vivek Joshi has said. 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 told PTI in an interview. However, he said, 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 insurance companies between December 2014 and January 2024, he said. During the period, Joshi said, the number of insurance players increased from 53 to 70 as of January 2024. Insurance penetration increased from 3.9 per cent in 2013-14 to 4 per cent in 2022-23 while insurance density rose from $52 in 2013-14 to $92 in 2022-23, he said.

Insurance penetration and density are two metrics, among others, often used to assess the level of development of the insurance sector in a country. While insurance penetration is measured as the percentage of insurance premium to GDP, insurance density is calculated as the ratio of premium to population (per capita premium).

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