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May 2, 2022

Indian regulator increases investment cap for insurers in BFSI space

India’s insurance regulator has increased insurance companies’ investment cap in insurance and financial activities from 25% to 30% of their investment corpus. 

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The move is aimed at giving insurers more room for their investment strategy and allowing them to increase exposure to banking, financial services and insurance (BFSI) space.

The announcement came before the Life Insurance Corporation of India’s $2.8bn initial public offering (IPO) opened for subscription to anchor investors.

According to sources, some large private insurers plan to subscribe to LIC’s offering reserved for anchor investors. 

“The authority in the exercise of its powers conferred under Regulation 14(2) of the IRDAI (Investment) Regulations, 2016, permits all Insurers to have exposure to financial and insurance activities up to 30 per cent of investment assets.” IRDAI’s statement read. 

Accordingly, the limit of 25% of investment assets stands revised to a limit of 30%, it added. 

Max Life Insurance senior director & chief investment officer Mihir Vora said: “It gives more flexibility to the insurance companies to invest, allowing them to diversify their exposures further.”

In a separate development, a committee appointed by IRDAI has proposed 14 low-cost micro-insurance (MI) modules to expand protection plans for uncovered citizens and small businesses. 

The MI products are aimed at helping low-income groups recover from common risks such as critical illness, death, and destruction of property and business among others. 

The one-stop solution to provide insurance cover will significantly aid in increasing insurance penetration among these groups of the society, the panel said in its report. 

Free Report
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How attractive are current investment opportunities in Europe?

Europe has been identified as one of the most favorable regions for investors, seeing high investment activity in the past year. Most of these investments have been through Debt Offering, valued at close to $700 billion. The region has provided attractive investments in a diverse set of companies. Companies who tend to major themes such Digital Media, Cloud, Artificial Intelligence, E-commerce, and Big Data are recording the highest number of deals, with Digital Media recording close to 2,000 deals. However, GlobalData’s whitepaper offers a full view of the market, analyzing less successful or attractive points of investment as well, examining statistics on Equity Offering investments and PE/VC deals. Understand how government agencies for economies around the world use GlobalData Explorer to:  
  • Track the M&A and Capital Raising volumes into their target market
  • Identify the top sectors in the target market attracting the investments
  • For any investment segment, identify the top Investors inside and outside the target economy that are already investing in the Segment
  • Assess and showcase the growth potential for various Industries in the target economy
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.

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