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

12 Mar 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
    • Cost of products will come down.
    • Foster the greater competition
      

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Swarn Singh

Plutus IAS Current Affair Team Member