Indian Government’s recent contentious decision, of opening ways for FDI by allowing 51% in multi-brand retailing and 49% in aviation, is now being followed by the approval of 49% FDI in insurance and 26% in pension sector.

The bill, however, needs to get the approval of the legislation adding to the fact that BJP is
Insurance regulator IRDA predicted that the life insurance sector would require capital boost of around R40000 Cr for enough industry growth to account for 8% of GDP.

Earlier, in the insurance segment, 26% share was given for foreign investment and the pension sector was not kept under the boundaries of FDI.

According to IRDA report, the country currently has 23 life insurers and 24 non-life insurers and a reinsurer. Among these, the life insurance market was dominated by LIC with 72.98% market share and the rest lying with private insurers.
This reflects a market to be tapped given necessary regulatory approvals and conditional liberalization of the sector.

The insurance sector in India is expected to reach around $400 Bn in premium income by 2020, a Boston Consulting Group report stated.

In the pension market, over 80% of the working people are in the unorganised sector without regular salary and benefits.

Indian pension fund market is set to reach around R20 lakh Cr by 2015 from the present level of about R15.4 lakh Cr, according to ASSOCHAM and it also added that the country would be able to raise the share of pension fund assets to GDP from the current level of 5% to around 17% by 2017, resulting in assets worth $165.85 Bn.