Liberalisation over the years along with sustained efforts by the sectoral regulator makes the Indian insurance sector an attractive destination for investment, N S Kannan, MD and CEO of ICICI Prudential Life Insurance said on Monday.
Speaking at the 19th Indo-US Economic Summit, Kannan said over the last six decades, insurance is being generally sold as a savings instrument in India, though it has propelled the sector.
Presenting India’s case in terms of ease of doing business, he said post liberalisation, foreign direct investment in the insurance sector was raised from 26 per cent to 49 per cent in 2015 and further to 74 per cent in 2021.
“I would say this is a great move. On one side it is a calibrated move and on the other side…74 per cent is an outstanding number…From international investors’ perspective….Foreign investors should look at the Indian insurance industry in a favourable light and invest more,” Kannan said.
Whereas liberalising the sector was a policy move by the government, sectoral regulator Irdai too has taken a host of measures over the years to make the industry attractive to foreign investors.
Albeit the policyholders’ protection requirement has to be tightly regulated, he said, the Insurance Regulatory and Development Authority of India (Irdai) has put in a lot of effort over the years.
He said Irdai has eased tight control by Indian owners.
“I think that regime has been completely diluted to make sure there are very light conditions today for foreign investment in the form of just having a majority in terms of Indians as key managerial persons…All the other norms with respect to tight control by Indian enterprises, all that have gone away,” he added.
Besides, it has allowed insurers for ‘use and file’ from the earlier ‘file and use’ requirement where insurers had to take permission to launch some kind of products before offering it to customers.
Instead, they can now do a pilot of a product and launch it later in a formal manner. Talking about the Bima Sugam portal under the aegis of Irdai, Kannan said it will be an end-to-end commerce digital platform allowing all the services under one roof, including claims settlement.
He also said the Indian financial sector withstood the financial crisis in much better way than others and the NPA (non-performing asset) level in the insurance sector was next to nothing.
“We have an enabling regulator and we can deliver in a much meaningful manner going forward,” he added.
Reiterating Irdai’s growth and development agenda, he said the chairman has articulated insurance for all by 2047, the year to mark India’s 100th Independence anniversary.
Irdai has the vision to provide insurance, both life and health, to all the citizens of the country by 2047.