India's more relaxed rules on investment in insurers set to attract U.S., European players
By Aditya Kalra and Abhirup Roy NEW DELHI (Reuters) - The Indian government on Monday said it plans to raise limits on how much foreign companies can invest in the country's insurance industry, a move that could attract inflows from U.S. and European insurers. Finance Minister Nirmala Sitharaman in her budget speech for 2021-22 said the government would allow foreign direct investment of up to 74% in insurance entities, up from 49% currently, clearing the way for 'foreign ownership and control with safeguards'.
By Aditya Kalra and Abhirup Roy
NEW DELHI (Reuters) - The Indian government on Monday said it plans to raise limits on how much foreign companies can invest in the country's insurance industry, a move that could attract inflows from U.S. and European insurers.
Finance Minister Nirmala Sitharaman in her budget speech for 2021-22 said the government would allow foreign direct investment of up to 74% in insurance entities, up from 49% currently, clearing the way for "foreign ownership and control with safeguards".
The change could attract investments from international insurers, industry sources said, many of which have existing joint-venture operations in India, including from American International Group and Britain's Prudential Plc.
Take up of life and health insurance products is low in the country of 1.3 billion people but is expected to grow. The country's investment promotion agency, Invest India, expects the insurance market to be worth around $250 billion by 2025.
"It's a huge market by size for them. That is the main driving force for companies," said an Indian lawyer who advises global insurance firms.
A second lawyer said several insurers from Asia have also shown interest in ramping up Indian investments, and started seeking more details about Monday's proposal hours after it was announced.
In a statement to Reuters, lobby group U.S.-India Business Council (USIBC), part of the U.S. Chamber of Commerce, said New Delhi's decision will help American insurance companies enhance financial inclusion in India.
"For foreign investment to flow, though, management and control regulations need to strike the right balance between prudent safeguards and owners' needs," said Nisha Biswal, President of the USIBC.
India's state-run Life Insurance Corporation dominates India's life insurance market, but private players have rapidly grown in size.
ICICI Prudential Life Insurance - a joint venture between ICICI Bank and Prudential - last year said its assets under management crossed 2 trillion rupees ($27.4 billion). Prudential said in August India was a market where it had "significant investment appetites for growth".
More relaxed rules for foreign investment in insurance will also help some Indian insurers to attract capital and boost their businesses after a slowdown caused by the COVID-19 pandemic.
"The imperativeness of the life insurance sector in the economy has gained paramount importance in the aftermath of COVID," Niraj Kumar, Chief Investment Officer of Future Generali India Life Insurance, an Indian JV of Italy's Assicurazioni Generali SpA, said in a statement.
"The bold step ... will provide an immediate backstop in terms of capital for growth and improve the insurance penetration and financial inclusion in the economy."
(Reporting by Aditya Kalra in New Delhi and Abhirup Roy in Mumbai; Editing by Euan Rocha, Jane Merriman and David Evans)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply
By Christoph Steitz, Tom Käckenhoff and Arno Schuetze FRANKFURT (Reuters) - German conglomerate Thyssenkrupp ended talks to sell its steel division to Britain's Liberty Steel due to differences over value, the latest setback in efforts to consolidate the European sector. Liberty Steel, led by commodities tycoon Sanjeev Gupta, last month submitted a firmed-up non-binding bid for Thyssenkrupp's steel unit, Europe's second biggest in terms of sales, which sources said included commitments to protect jobs and sites.
(Reuters) - Reddit trading lingo may filter in to Washington on Thursday when top hedge fund managers, the head of Robinhood and Roaring Kitty himself are set to give testimony before U.S. House of Representatives lawmakers.
By Stephanie Kelly NEW YORK (Reuters) - Oil prices steadied on Thursday, with Brent edging back from a 13-month high, after a sharp drop in U.S. crude inventories supported prices, while buying spurred by a cold snap in the largest U.S. energy-producing state petered out.