In what could be initial signs of growth revival in the insurance sector, the government on Wednesday announced that the Foreign Direct Investment (FDI) in the cash strapped sector has jumped 152% to $341.43 million during March and September this year.
The statement was made by Commerce and Industry Minister Nirmala Sitharaman in a written form to a query raised in the Rajya Sabha during the question hour.
In her written reply, it was further added that during March-September 2014, the sector had received FDI worth $135.30 million.
The opening up of the insurance sector, earlier this year, by increasing the FDI cap from 26% to 49% has injected a fresh lease of life in the stagnating sector. Until now, the Indian insurance sector was high on promise but low on yield. Much of the consolidation was pending due to the lack of liquidity among the local insurance players to cover such a large population.
However, post the FDI hike, foreign players have been making a beeline to consolidate their holdings in ongoing joint ventures with their Indian partners. Foreign players such as Bupa has struck a deal with Max to increase its holding to 49% in Rs. 191 crore deal. Recently Nippon Life also announced its decision to increase their share in Reliance. London-based Aviva has also proposed to increase its shareholding in its JV with Dabur to 49%.