Indian insurance: starting a new chapter

By easing foreign shareholding restrictions and divesting stakes in state-owned insurers, New Delhi hopes to overhaul India’s underperforming insurance sector.

India is often depicted as an insurer's dream with a population of 1.3 billion and drastically low levels of market penetration, solid long-term returns are virtually guaranteed.

But the reality has so far proved to be very different and little has changed in the 17 years since India allowed the establishment of private insurance companies in 2000, with major insurers left stranded on a range of issues such as controlled pricing, high expense ratios and massive underwriting losses. 

There are signs, though, that the industry is on the cusp of major change, thanks to a number of recent government reforms that could yet help it fulfill...

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