A senior executive of a large broking firm in India has said that the Indian government has agreed to consider the industry’s request to allow 100% foreign direct investments in insurance broking, according to a report from moneycontrol.com.
However, the approval will come with certain restrictions, such as having a minimum percentage of Indian members on the board, and curbs on the outsourcing of business activities.
Currently, corporate agents and insurance companies are allowed a maximum permissible limit of 49% foreign ownership, while the remaining 51% must be held by Indian entities.
According to the report, the approval will likely be issued by the insurance authorities in the next couple of months.
Latest data showed that gross direct premium by brokers grew from around Rs192.74 billion (US$2.9 billion) in fiscal 2015 to almost Rs300 billion in fiscal 2018 for non-life insurance.
About 65% of the corporate business, including segments such as group health, fire insurance, project insurance and marine insurance is sourced through brokers.
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