Challenges to American Insurance Companies in India

Abstract

In India, insurance is a national matter in which life insurance and general insurance are yet booming sectors with vast opportunities for different global companies, Life insurance premiums account for 2.5% and general insurance premiums account for 0.65% of India‘s GDP. The Indian insurance sector has gone through several phases and changes, especially after 1999/2000 when the Government of India opened up the insurance sector for private companies to solicit insurance, allowing FDI up to 26%. Since then, the insurance sector in India is considered as a flourishing market amongst global insurance companies. In March 2013, the FDI limit has been raised from 26% to 49%. This long pending step will definitely boost the confidence of global insurers and investors. However, the largest life insurance and general insurance companies in India are still owned by the government. The foreign insurance players are, however, quite capable of grabbing the vast opportunities and successfully meet challenges, if any.