The budget proposal to increase foreign direct direct investment in the insurance sector from 74 percent to 100 percent is expected to come. Foreign insurance companies will be able to open their branches in India and they will not have to find a minor Indian partner, but the inner sources in the industry said that they would need to do a lot of exercise to deal with the complexity of distribution in India.
In India’s insurance market, private life insurance sector dominates the distribution of banks in the insurance sector, while in non -life insurance, more policies are sold through agents. This is a challenge for foreign insurers to work in the distribution network of insurance without partner from India.
The people of the industry have a common opinion that it was necessary to open 100 percent FDI, which will bring much awaited capital in the insurance sector. The number of traders in this region will also increase, which is necessary in view of the large population of India.
Experts said that apart from this, it is also likely to increase competition, technical transfer and reduce insurance premium.
According to Pallavi Malani, the head of the insurance sector in India in the Boston Consulting Group, it will not be easy, as foreign companies will have to mold their models according to India’s specific nuances. He said that when it comes to life insurance, we have a lot of bank-settlement models for at least private businessmen and businesses and brokers in health and other policies depend on agents and brokers. In such a situation, accepting the needs of India and its challenges is not very easy.