Full FDI in insurance may not shake sector

INDIA'S LIFE INSURANCE penetration stands at just 2.8% of GDP, while general insurance penetration is even lower at around 1%.

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Rao said the industry's growth model has been built over decades on deeply entrenched distribution ecosystems, including agency networks, bank assurance partnerships - which for many insurers contribute 50% or more of business - and longstanding institutional relationships. "These are not easily replicated overnight, even with deeper pockets," he added.

Only three to four of the roughly 50 life and general insurers such as Generali Central, Generali Central Life and Aviva Life Insurance have foreign joint venture partners holding the upper 74% FDI limit. In cases such as Zurich Kotak and Ageas Federal Life, foreign ownership is at 70%, while for most other insurers it remains at 49% or 26%.