The insurance industry requires capital infusion of Rs 50,000 crore a year to double penetration in the next five years, said Debasish Panda, chairman of the Insurance Regulatory Development Authority of India (Irdai), on Friday.
Speaking at the CII-organised insurance and pension summit, Panda called upon corporates to pump in funds into the sector. “If we have to double the penetration, there is a need to infuse an additional Rs 50,000 crore every year,” said Panda. He plans to meet the heads of insurance companies after March to plan for the same.
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According to him, insurers need to raise their game beyond the present distribution arrangements with scheduled commercial banks, and have bancassurance arrangements with non-bank lenders, co-operative banks, as well as payment aggregators — calling upon the industry to widen its horizon.
Panda pointed out that return on equity stood at a healthy 14% for life insurers and 16% for non-life ones. He said it was even 20% in the case of top five companies. The industry needs to innovate as regards protection plans, instead of being content with traditional offerings.
Panda batted for making property insurance mandatory, and urged companies to take up the matter with housing regulators, and impress the need for the same with the Union housing ministry.
Speaking to a TV channel, Panda said with respect to the Budget 2023, he hopes insurance amendments get approved in Parliament. “This could prove to be a shot in
the arm for insurance companies.” Panda told the channel that enthusiasm could be seen from foreign investors in the Indian insurance space, and that insurers should partner all kinds of banks for distribution.
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Speaking at the CII event, Manoj Anand, whole time member of Pension Fund Regulatory and Development Authority, said insurers should offer annuity plans offering protection from inflation. He pegged the amount seen flowing into annuity plans floated by insurers at Rs 11,000 crore in the next five years.
(With agency inputs)