Raising FDI cap in insurance will spur growth: Irda

Kochi: Raising FDI cap in the insurance sector will spur growth in this industry, ensuring entry of more players, Insurance Regulatory and Development Authority said on Friday.

Hailing the Centre's Budget 2014-15 announcement to raise the FDI cap in insurance to 49 percent, Irda Member (Finance and Investment) Radhakrishnan Nair told reporters that "more players will come and existing players will be strengthened".

Large scale capital coming in the sector will create more jobs, he said on the sidelines of an Insurance Conclave organised by the CII here.

Earlier, delivering the inaugural address at the 'Kerala Insurance Conclave: Towards Development and Better Delivery', he said the hike in the FDI limit will help companies expand operations rapidly.

It would also help insurance companies to improve their technology, he added.

Post liberalisation, the insurance industry has witnessed impressive growth with life business growing at a rate of 18.42 percent in the last 14 years, he said, adding that non- life insurance sector has seen a growth of 16.62 percent.

Health insurance sector was in nascent stage and was a growing segment, he said, adding that growth in health insurance has been steady with a compounded annual growth of 33.11 percent.

Radhakrishanan said the future agenda for the sector include leveraging technology, pricing the agriculture insurance for wider coverage, expanding the health insurance coverage by taking advantage of government sponsored schemes, launching of new products like catastrophe bonds and mechanism for tapping uninsured vehicles.

In his address, V P Nandakumar, Managing Director and CEO, Manappuram Finance Ltd said the insurance regulatory framework has evolved over the last decade to match needs of the sector.