Insurance Regulatory and Development Authority of India (IRDAI) Chairman Debasish Panda on Wednesday said that the insurance players need to raise more capital as the sector is likely to witness an accelerated growth going ahead.
In January this year, the Chairman had said the sector needs to infuse approximately Rs 50,000 crore every year in order to double the insurance penetration in the country.
“I would like to ask all of you (insurance players) to go to your boards and think in terms of augmenting your capital because, going forward, we expect that the growth will be speedier than before. Hence, we need more capital to be pumped into the sector,” Panda said, while speaking at the annual insurance conference organised by Ficci on Wednesday.
He said that the new set of regulations are making investment in the insurance sector more attractive for investors and promoters. The investment landscape is being rebuilt to attract more investments through the foreign direct investment (FDI) route. The FDI limit has been enhanced to 74 per cent from 49 per cent earlier.
“Those companies which have a foreign partner should look at this opportunity to bring in more capital and grow even faster than they have been growing in the past few years,” Panda added.
Speaking on the regulatory and supervisory regime, the Chairman said the regulator is working towards moving from a factor-based solvency regime to a risk-based capital regime.
IRDAI is also moving away from a compliance-based approach of supervision to a risk-based supervision framework, he said. Even, the process to switch to the International Financial Reporting Standards (IRFS) is underway.
“All of this will help the industry, going forward, in efficient use of the capital. It will also help the companies and the regulator to have a real time profile of the risk as far as the companies or the intermediaries are concerned,” Panda said.
He further said that in 2023, three new insurance companies – Kshema General Insurance, Acko Life Insurance and Credit Access Life insurance got registered.
The regulator is evaluating nearly 20 more applications for granting license, he said.
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