A GROWING FORCE

The insurance industry in India is well positioned to grow and prosper with changing dynamics coupled with progressive policy announcements by the government

In the last two decades, the Indian insurance market has grown significantly. A number of factors have contributed to this phenomenal growth, including increased awareness and access to insurance products, economic development, and government policies that have supported the growth of the industry. An increase in disposable incomes and a growing middle class have also led to greater demand for insurance products.

In the late 1990s and early 2000s, the Indian insurance market was primarily dominated by state-owned companies such as the Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC), and a limited number of private players.

However, in the year 2000, the government opened up the insurance sector to private companies and foreign investment, which led to an increase in the number of insurance providers and a wider range of products for consumers.

Foreign Direct Investment (FDI) in the Indian insurance industry has been allowed since 2000, with a cap of 26%. In August '15, the Indian government increased the FDI limit from 26% to 49%.

This move was made to provide insurance companies with access to more capital, which is expected to help them expand their operations and to offer more products to customers.

FDI in the insurance sector has helped bring in more capital, technology, and expertise to the Indian insurance market.

Foreign companies brought with them a wealth of experience and expertise in underwriting, risk management, and product development, which improved the overall quality and efficiency of the Indian insurance market. They also introduced new distribution channels and technology platforms, which helped in expanding the reach of insurance products to more people, particularly in rural areas.