Mumbai: In a recent budget tabled in Parliament, Finance Minister Nirmala Sitharaman has proposed raising the Foreign Direct Investment (FDI) limit in the insurance sector from 49 per cent to 74 per cent. Insurance experts say the decision benefits the general public as well as the insurance industry. The arrival of foreign companies in the insurance sector is expected to increase competition in the sector. This allows insurance companies to announce policies at cheaper premiums with the best cover. Which will benefit ordinary users. So it will be easier for insurance companies to raise funds for their needs.
There are also three benefits to increasing FDI in the insurance sector. Foreign investment in first country insurance companies will increase. The need for which is much greater now. This is because the coroner’s insurers will be greatly relieved and capital inflows will increase.
Increasing FDI in insurance companies will also increase employment prospects in the insurance sector. At the same time, increasing the production of insurance will also increase the opportunity to buy insurance. According to experts, the increase in FDI will increase insurance penetration (premium participation in GDP) in the country. Which is currently 3.76 per cent. That is, the share of insurance sector in GDP is only 3.76 per cent. Internationally this is 7.23 per cent.
The emergence of foreign companies in the insurance sector will open new offices. Which will boost infrastructure. The demand attached to it will increase and insurance companies will be able to provide the best facility to the general public.