New Delhi: The insurance industry in the country is expected to grow ‘significantly’ in 2017 and coming years due to rising financial literacy and government initiatives, according to a report by consultancy firm Dun & Bradstreet. "The Indian insurance sector is set to mark a significant growth in the coming years. The lower level of penetration, favourable demography, initiatives like 'Pradhan Mantri Jan-Dhan Yojana' for enhancing financial inclusion, rising financial literacy along with increase in domestic savings consequent to rise in per capita income are expected to support the growth of insurance sector going forward," the 'Insurance Sectoral Outlook 2017' report released by the firm on Monday said. The report said with liberalisation of Foreign Direct Investment norms for the sector, many foreign insurance firms have entered India to explore the untapped potential of this industry. The NDA government announced last year that foreign firms could invest upto 49% in domestic insurance ventures. Foreign investment into the insurance sector poured in last year as new firms entered the market, and is expected to accelerate growth in the sector in the coming years. Lloyds, the United Kingdom-based reinsurance company, is expected to set up its branch in Mumbai in 2017, the report said. Apart from this, the Reinsurance Group of America, German companies Hannover Re and Munich Re, and Switzerland-based Swiss Re as well as French reinsurer SCOR SE have received approval from the Indian insurance regulator to start operations in India. These developments are expected to increase competition and operational efficiency, which would raise the penetration of insurance products in the country, according to the report. The favourable regulatory environment in the country is also expected to fuel the growth of the sector. To provide insurance cover mainly to below poverty line households, the government has introduced schemes like Rashtriya Swasthya Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana. These schemes are expected to help in penetration of insurance sector in lower and lower-middle income population, which currently does not have widespread access to insurance. The report revealed that the insurance sector is expected to witness surge in the flow of foreign capital in the coming years given the relaxation of FDI norms.
