Increase in the FDI in Insurance sector (GS-3 Economics, Indian Express)

  • Why to increase:
    • FDI will improve the insurance penetration, Insurance density
    • Amendment in the Insurance Act 1938 which will raise the FDI limit to 74 per cent, from the current 49 per cent
    •  insurance penetration (estimated as a percentage of insurance premium to GDP) in India has risen from 2.71 in 2001 to 3.76 in 2019
    • Country has favorable demographics
    • Increase in the middle class
    • Provide safeguard from adverse consequences.
    • Why Low penetration
      • Increase in coverage increases the cost.
      • Indian companies provide a higher rate.
    • Effect of Increase in the FDI