Despite Losses, Insurance Industry Attracts Investments: Regulator

Hyderabad: The insurance industry is still attractive to many investors even though many players are still making losses and the sector needs lots of trained personnel to cope up with growth, the Insurance Regulatory and Development Authority said on Wednesday.

The FDI limit will be fixed by the government and Irda's job is to ensure that regulations are followed by the companies, the insurance watchdog said.

"Insurance is attracting the attention of the general public and investors are ready to put money even though many companies are still making loss," Irda Chairman T S Vijayan said on the sidelines of a programme by Indian Institute of Risk Management.

Citing the example of Life Insurance Corporation of India, he said government capital infusion into the company was only Rs 5 crore in 1956 when it was started.

"Lot of discussions are going on whether it is 26 per cent or 49 per cent FDI in insurance. The debate is happening... The purpose of bringing in the capital is more important," he said, hinting that more than bringing capital, other issues such as professionalism and skilled manpower are important for the growth of the sector.

The success of the recently-launched 'Jan Dhan Yojana' by the Prime Minister is largely due to the insurance coverage attached to the bank account, Mr Vijayan said.

There is huge potential for data analytics (for the sector) in India which has over 40 crore life insurance policies, he opined.