• Tuesday, February 07, 2023

Business

India insurance sector requires £5b capital per year, watchdog says, appeals to conglomerates for funds

Representational Image (iStock)

By: Shubham Ghosh

The insurance industry will need a capital infusion of Rs 50,000 crore (£5 billion) per year to double its penetration in the next five years, sector watchdog Irdai’s (Insurance Regulatory and Development Authority of India) chief Debasish Panda said on Friday (20).

Panda appealed to business conglomerates to channelise funds into the sector, saying the return on equity is at a healthy 14 per cent for life insurers and 16 percent for non-life, while in the case of top five companies it goes up to 20 per cent as well.

It can be noted that the insurance sector is a very competitive industry, with nearly two dozen life insurance companies and over 30 non-life ones. The overall penetration for insurance is 4.2 per cent as of FY21-end.

“If we have to double the penetration, every year there is a need to infuse an additional Rs 50,000 crore,” Panda said addressing the annual insurance and pension summit organised by industry lobby CII here.

He said the number has been arrived at after doing an analysis of current GDP growth, inflation and penetration, and also added that he will meet the heads of insurers after March to prepare in pursuit of the same requirements.

(PTI)

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