Know How FDI Helps In Insurance
Valuation Unlocked:
A lot of banks have reached to insurance segment. The opening of the sector for higher FDI will allow public sector banks to reduce their stakes in insurance subsidiary companies and use the funds for banking operations. This can be done through the listing of their insurance subsidiaries as well.
The higher FDI limit will boost the valuation of insurance companies and help them to meet their capital needs, the report said. The holding of Indian partners in insurance ventures ranges from 74 percent to 100 percent currently.
Insurance Regulatory & Development Authority (IRDA):
The public sector Insurance companies have continued to dominate the insurance market. India is among the most promising emerging insurance markets in the world. The role of Foreign Direct Investment in the present world is noteworthy. It acts as the lifeblood in the growth of the developing nations. The wave of liberalization and globalization sweeping across the world has opened many national markets for international business.
Mobilize National Savings:
A major role played by the insurance sector is to mobilize national savings and channelize them into investments in different sectors of the economy. FDI in insurance would increase the penetration of insurance in India; FDI can meet India’s long term capital requirements to fund the building of infrastructures.
Insurance sector has the capability of raising long-term capital from the masses, as it is the only avenue where people put in money for as long as 30 years or even more.
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