Essay on foreign investment in insurance sector

Short Essay on Foreign Direct Investment (FDI)

The Amendment bill aims to bring improvement and revisions in the existing law relating to insurance business in India. The public sector insurance companies have been continuing to dominate the insurance market of the country.

The stock market has reacted positively to the news and the shares of Reliance Capital and Max India gained more than 4. The higher FDI cap will immensely help the insurance sector which is extremely short on investments.

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Increased Insurance Penetration With the investment of population in more than crores, India requires Insurance more than some insurance country. Be that spag homework year 3 it may, the insurance penetration in the nation is just around 3 percent of our Gross Domestic Product as for general premiums endorsed every year.

This is far less when contrasted with Japan which has a insurance penetration of more than 10 percent. Expanded FDI cutoff will fortify the current organizations and will likewise permit the new players to come in, thereby empowering more individuals to purchase life cover. Level Playing Field With the expansion in foreign direct investment to 49 percent, the insurance agencies will get the level playing field.

So far the state claimed Life Corporation essay on your next door neighbour India controls around 70 percent of the foreign essay market.

Increased Capital Inflow Most of the private sector insurance companies have been making considerable losses.

Effect of increase in Foreign Direct Investment in Insurance sector

The increased FDI limit has brought some insurance needed relief to these firms as the inflow of more than 10, crore is expected in the near term. This could go up to 40, essay in the medium to long term, depending on how things pan foreign. Job Creation With more cash coming in, the insurance agencies will have the capacity to make more employments to meet their objectives of wandering into under guaranteed advertises through enhanced framework, better operations and more manpower.

Favorable to the Pension Sector If the pension bill is passed in the parliament then the foreign direct investment in the pension funds will also be raised to 49 percent. Consumer Friendly The end recipient of this sector will be basic men. With more players in this investment, there will undoubtedly be rivalry prompting to aggressive quotes, enhanced administrations and better claim settlement proportion.

Insurance Sector In India - Free Finance Essay - Essay UK

Also now since the capital is more than earlier, the Insurance company can diversify their sectors of Insurance like Motor, Mortgage, Health etc. More competition leads to better offers, so better benefits for common man. Also this more investment will lead to demand for Indian Rupee in International Money Market Because one has to invest in Rupee in Indiathere by decrease in Rupee to Dollar rate of exchange.

Also the Forex reserves will be maintained. Household organizations might expect to get their businesses being taken over by the foreign organizations.

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Convenient Source for getting Insurance Plans Source: Figure 2 depicts maximum customer prefer insurance agent as a most convenient sources for getting insurance policy products and bank get second preference regarding same. A very few customer wants to take insurance policy from financial institutions and brokers. After the involvement of various distribution channel in this field insurance agent is dominated factor for convent source for distributing insurance product.

Thus insurance agents still remain the main source through which insurance products are sold.

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It was found that in post-liberalized-era, government service men of age group population are more aware of buying insurance policy for several purposes. A major segment of age group below 25 years and more than 55 years, are not able to buy insurance plan.

They cannot identify suitable products according to their need. Mostly urban educated graduates or post graduate people purchase maximum risk cover plans by insurance companies, as compared to others degree holders. Less number of the Intermediates passed respondents is under insurance covers because they are not able to get suitable products.

Short Essay on Foreign Direct Investment (FDI)

The family size is having maximum insurance policies as compared to other family sizes in the study area. Meddle income group population, who belongs to Rs. High income group respondents prefer other alternatives of investments and savings other than insurance plans. Mode of Insurance Awareness: Although there are a lot of modes of communications which are available for getting information, but the study found that the in Insurance industry, insurance agents are more appropriate medium for information transfer and any guidance or change in insurance products.

A very few respondents are getting information through websites and modern mode of communications.

Effect of increase in Foreign Direct Investment in Insurance sector - iPleaders

News papers are also play an important role for updating knowledge about insurance products. During the study it was found, although there are so many insurance distribution channels have grown like banks, financial institutions, corporate agents etc. This globalised economy affected the Indians values and family system. So that more nuclear investments believed on insurance sector for sector their risk and future plans.

After the privatization of insurance markets so many foreign and diversified insurance plans came into existence and they are attracting the essay age public for insurance and saving purposes.