The government’s proposal to allow 100% foreign direct investment (FDI) in the insurance sector, introduced through the Insurance Amendment Bill tabled in Parliament by the Finance Minister, could act as a significant growth catalyst for the industry, according to Amit Jhingran, Managing Director and Chief Executive Officer of SBI Life Insurance Company.
Jhingran said the move is expected to bring long-term capital, technology and innovation into a sector that remains significantly underpenetrated in India.
Calling the proposal one of the most anticipated reforms for the insurance industry, he said higher foreign investment would help expand the market and improve customer outcomes. “This will attract long-term capital to the country and lead to technological upgradation and greater innovation,” Jhingran said, adding that low insurance penetration and density levels indicate substantial headroom for growth.
He also welcomed the decision to drop the proposal on open architecture for individual agents, which had earlier raised concerns among life insurers. Individual agents contribute around 28% of SBI Life’s new business premium, and the proposed change could have resulted in higher costs or potential business leakage.
Jhingran said the company has been working over the past two years to strengthen its agency channel and expects this focus on improving its distribution mix to continue.
On the likelihood of increased competition following easier entry norms and lower net worth requirements for new insurers, Jhingran said incumbent players have little reason for concern. He noted that the Indian insurance market is large enough to accommodate more participants, including those focused on niche segments, and that wider participation would help expand the overall market rather than materially impact established players.
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Jhingran added that the absence of a composite insurance licence in the Bill does not materially affect SBI Life, as the SBI group already operates a separate general insurance subsidiary and the provision was not a strategic priority for the company.
He also took a positive view of the enhanced powers proposed for the Insurance Regulatory and Development Authority of India (IRDAI), including greater oversight of investments, commissions and expenses of management.
According to Jhingran, these measures would strengthen governance and improve disclosures across the industry. “This will bring more transparency and create a stronger regulatory environment for the orderly growth of the sector,” he said.
For the entire interview, watch the accompanying video