Vikas Newatia, Managing Director, EMB India

The Indian insurance market has made significant progress since it was liberalised just over a decade ago. Indeed, over the last six to seven years, the private sector companies’ share of the market increased from 4.0% percent to 40.0%. However, the foreign direct investment limit in the insurance sector is confined to 26.0%, despite earlier indications by the authorities that this would be raised to 49.0%. Here, Vikas Newatia, Managing Director of actuarial firm EMB India, addresses a number of issues including the nature of the competition between the private sector and the more established public sector companies, the possibility of the FDI limit being raised, the nature of the opportunities in the market for foreign companies as well as changing attitudes in the market towards rate cutting, pricing, and reserve setting

In your view, how inhibiting is the much publicised 26.0% foreign investment cap on the development of the Indian insurance market?

It is very inhibiting. It is discouraging overseas companies from investing in India and from introducing their expertise.