The UPA government is still hopeful of raising foreign direct investment stake in the domestic insurance sector to 49% from 26 %. Pawan Kumar Bansal , minister of state for finance said, ?The necessary draft bill is being currently considered by the group of ministers after being cleared by cabinet. We are hopeful of raising the FDI to 49%,??
Bansal was addressing distinguished gathering of insurance professionals on Thursday on the occasion of GIC Re collaborating with Hannover Re, the fourth largest international reinsurer for life reinsurance business.
However, Bansal said that the 26% was not a barrier to the entry of the foreign players into domestic insurance industry. ?There are now 17 more private life insurance and 12 more general insurance players in the country. The life insurance premium has grown from Rs 9,700crore in 2000-01 to over Rs 93,000 crore in 2007-08,?? said Bansal.
?The Indian market has larger expectations from us for reinsurance support in the area of life insurance keeping in view our excellent track-record in the area of non-life reinsurance,?? said Yogesh Lohiya, chairman & managing director, GIC Re.
?We will help life reinsurers to launch more products and train GIC Re employees in life reinsurance business,?? said Wilhelm Zeiler, chairman, Hannover Re. It ensures that the need to enhance local retention capacity and conserve foreign exchange reserves remains a strategic economic priority. With the strategic focus on international business portfolio, GIC Re has created a lot of goodwill as a professional reinsurer by enhancing its presence in the international market. Reinsurance business is dominated by non-life business. However, each reinsurer looks forward to having some portion of life and health business in its portfolio. GIC Re and Hannover Re are no exception. Life reinsurance is currently concentrated in the hands of few reinsurers who have developed the necessary skills, techniques and support systems required for the business.