The Indian government is considering lifting the lid on foreign direct investment (FDI) in insurance broking to give its insurance sector a capitalisation boost, the new Indian Express reported.
According to an official, the government’s looking at a proposal to give insurance brokers the same treatment as India’s other financial services intermediaries which benefit from having no bars placed on foreign investment opportunities.
In India, foreign investment in insurance broking, third-party administrators, surveyors, and loss assessors is currently capped at 49%.
“Insurance broking is like any other financial or commodity broking services. The issue was recently discussed in an inter-ministerial meeting. The government is positively looking at the matter,” the official said, reported by the new Indian Express.
Industry experts have reportedly said the Indian insurance sector needed strengthening after suffering from weak capital distribution networks.
The new Indian Express quoted Prudent Insurance Brokers Director, Pavanjit Singh Dhingra, who commented that a decision to remove the foreign investment limit would stimulate insurance penetration throughout India – which lags far behind the global 6.2% insurance penetration average with a large protection gap penetration at just 3.2% in 2015.