DUBAI: The Islamic insurance market will continue to grow at current levels in the coming two to three years as more GCC, southeast Asian and African countries introduce mandatory health care, according to Moody’s Investors Service. Takaful growth will be helped by relatively low levels of insurance penetration and large Muslim populations in these regions, Moody’s said in a report. Takaful accounted for an average 29 percent of total insurance premiums in its largest markets at the end of last year, up from 27 percent in 2016, while penetration of all insurance products is in the low to mid-single digits compared with 11.2 percent in a mature market, such as North America, Moody’s said.
Star Health and Allied Insurance Co Ltd, the health insurer backed by billionaire Rakesh Jhunjhunwala and Westbridge Capital, raised around ₹1,200 crore in a pre-IPO funding round led by Singapore’s state investor GIC, two people aware of the development said.
The Union government on Monday expanded the limit of foreign direct investment in the insurance sector to 74 per cent, to attract overseas investors into the sector that has gained importance in Covid-19 pandemic. The existing FDI limit is 49 per cent.
A new structure at the board level was also part of the government announcement on Monday.
Under this, majority of directors on the board of the insurance company and key management persons would be resident Indians, with at least 50 per cent of directors being independent directors, and specified percentage of profits being retained as general reserve.
“I propose to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49 per cent to 74 per cent in insurance companies and allow foreign ownership and control with safeguards,” finance minister Nirmala Sitharaman said while presenting the Budget 2021-22.
Insurers welcome hike in FDI cap in insurance PTI
Mumbai: The government’s proposal to hike foreign direct investment (FDI) limit in the insurance sector to 74 per cent has been welcomed by experts. They said this move will bring in new sources for funding for the players, which will help them in strengthening their solvency. The move will also help in improving insurance penetration and job creation. It would result in an increase in merger and acquisition activity in the sector, industry players believe.
“I propose to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49 per cent to 74 per cent in insurance companies and allow foreign ownership and control with safeguards,” Finance Minister Nirmala Sitharaman said during her budget speech in the Parliament.
Indian insurance companies are likely to withstand the economic downturn exacerbated by the coronavirus pandemic, with general insurance premium growth in positive territory, Moody s Investors Service report has said. The report said that general insurance premium growth has been in the positive territory due to the persistent strong sales of health and protection cover. It noted that resilient sales of health and protection policies reflected the rising consumer awareness about these products during the pandemic, as well as regulator s actions in enabling the insurers to offer protection against the virus. The Indian insurers have also rapidly developed their digital offerings during the pandemic, the report added.