The Indian insurance sector needs an annual investment of ₹50,000 crore to double insurance penetration in five years, said IRDAI Chairman Debashish Panda.

“After March, I intend to meet the chairpersons of all the insurance companies to drive home the point that they have to factor this and start planning to infuse more capital. I’m glad some players have already started around that,” said Panda at an event organised by CII on Friday.

“I would like to reach out to the conglomerates in the country, individual investors who are interested to invest the money,” he said, adding that the top 5 insurance companies have demonstrated an RoE of around 20 per cent, with an average of 16 per cent for general insurance and 14 per cent for life insurance sector.

Reforms ‘a win-win’

The slew of recent reforms announced by the regulator, such as ‘use and file’ for new products and easing of capital raising norms, are a win-win for all stakeholders in the sector — insurers, policyholders, and distributors.

“Distributors will be able to sell policies seamlessly on the platform without the need to gather forms or deposit cheques. Everything will get settled on this platform,” he added, talking about the recently announced Bima Sugam platform, proposed to be an insurance marketplace.

Without giving a timeline on the launch of the platform, Panda said a committee has “deliberated upon and fast-tracked the proposal” and that the platform should become operational at the “earliest possible”, adding that more sectoral reforms are on the anvil.

“Amendments to the Insurance Act (for instance, composite life and general insurance licence for companies) have been accepted by the government. Let’s hope that they go through in the next Parliament session,” he said.

Panda said India is set to become the sixth largest insurance market by 2032 from being the 10th largest at present, but the sector needs more investments to achieve the ‘insurance for all’ target set by the IRDAI for 2047.

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