The insurance industry will need a capital infusion of Rs50,000 crore per year to multiplyits penetration in the next 5 years, Insurance sector Regulator Irdai's chief Debasish Panda said on Friday.
Panda appealed to business conglomerates to channelise funds into the sector, saying the return on equity is at a healthy 14% for life insurers and 16% for non-life, while in the case of top five companies it goes up to 20 per cent as well. It can be noted that the insurance sector is a very competitive industry, with nearly two dozen life insurance companies and over 30 non-life ones.
The overall penetration for insurance is 4.2% as of FY21-end. "If we have to double the penetration, every year there is a need to infuse an additional Rs 50,000 crore," Panda said while speaking at the annual insurance and pension summit organised by industry lobby Confederation of Indian Industry, at Mumbai.
He said the number has been arrived at after doing an analysis of current GDP growth, inflation and penetration, and also added that he will meet the heads of insurers after March to prepare in pursuit of the same requirements. "I'd like to reach out to the conglomerates who are present in this country, individual investors who are interested to invest their money," he said. India is at present the tenth biggest market in the world and will be the sixth biggest by 2032, Panda said.
