US insurance companies to get tremendous growth opportunities in Indian market: Irdai

Insurance regulator -- Insurance Regulatory and Development Authority of India (Irdai) has invited US-based insurance companies to invest in the domestic market as the industry offers tremendous growth opportunities alongside liberalised policy regime. Irdai Chairman Debashish Panda said Indian insurance companies now have greater control over their finances and profitability and it is up to them how and where they want to invest their money.

He said ‘We have rationalised the management of expenses and left it to companies to decide how and where they want to spend. We don't want to put a cap on everything, such as commission, reward payment, salaries and so on. These have been left to the boards of the companies. If you look at the private Indian insurers, we see that there is a higher return on equity (ROE) on average compared to the American insurers. So again, there is tremendous potential for the American companies to come and invest in India.’ Drawing a comparison, he said the Indian private sector insurance companies have ROE averaging around 23 per cent as against 13 per cent for the American companies. He added that ‘If we factor the risks, even then the number will be higher by about 500-600 bps than the US insurers’.

Talking about the number of US-based insurance companies who are present in India out of the 50 major insurers, he said there are only 4 such companies against 10-14 in other Asian countries. Panda said ‘So, my appeal to the American friends is (that) now is the time to come and invest here in India. The FDI regime has been liberalised, the regulatory regime has been looking forward to shake hands and taking you through this journey, this is the time India is poised to grow....tremendous opportunity and potential for the insurance sector to grow’. He noted that India's vision is to have Insurance for All by 2047.