August 30, 2019
Govt’s move will help bring more capital, which will boost investment, augment reach of intermediaries
Insurance intermediaries are brokers or agents who function as links between insurance companies and customers
The government’s decision to permit 100% foreign direct investment (FDI) in insurance intermediaries is expected to help foreign brokerages buy into Indian companies and deepen the market in terms of new products and technology. This could help bring in global products, practices, and sales strategies to India’s insurance market.
Insurance intermediaries are brokers or agents who function as links between insurance companies and customers.
Till now, FDI in the sector was capped at 49% under the automatic route, including for insurance broking, insurance companies, third party administrators, surveyors, and loss assessors.
However, the latest Union budget proposed to allow 100% FDI in insurance companies and the department of financial services issued a notification in this respect on 27 August.
As insurance broking is a capital-intensive business, companies are in constant need of funds to enter smaller towns and cities. Opening up the sector to foreign investment could bring in more capital, which will boost investment and augment the reach of intermediaries to larger customers.
#SEPC- Government has permitted 100% FDI in insurance intermediaries which will help foreign investors, and boost the market with new products and technology.