Insurance sector ready for immense expansion
Insurance sector ready for immense expansion Pawan Kumar Bansal, the minister of state for finance, indicated that the insurance sector in India is ready for enormous expansion. While addressing a meeting of Insurance Australia Group in Sydney, Bansal said that the banks have arrived in the insurance sector in the form of corporate agencies to cash on extensive and broad reach for marketing of insurance products. Insurance Regulatory and Development Authority (IRDA) notified Micro Insurance regulations facilitating insurers, to tap the potential of rural markets. As per these regulations, Non-Government Organizations (NGO), Micro Finance Institutions (MFI) and Self Help Groups (SHG), were recognized as micro insurance agents. It is envisaged that micro insurance would facilitate penetration of insurance to rural and remote areas. Foreign equity up to 26% is allowed in the insurance sector. The entry of foreign partners re sulted in the sector attracting FDI of USD 543 million, as on Mar. 31, 2007. In the insurance sector, though the growth in recent years has been significant, India is far behind the world average and ranks 78 th in terms of insurance density and 54th in terms of insurance penetration. IRDA granted registration to 37 insurance companies, which include 17 life insurance , 19 non-life insurance companies and one re-insurance company. At present, seventeen insurance companies are operating in the general insurance side and seventeen insurance companies on the life side. India offers a stable investment climate as well as a huge market with growing middle class. A.T. Kearney in `The FDI Confidence Index 2005` ranked India as the 2nd most attractive investment destination, just behind China, whereas `World Investment Report, 2005` ranked India as the 2nd most attractive investment destination among transnational corporations.
