SINGAPORE, Feb 3 (Bernama-BUSINESS WIRE) — AM Best views the revision of India’s foreign investment cap from 49% to 74% as an opportunity for significant inflow of capital into the country’s fast-developing insurance market.
In its Best’s Commentary, “India Insurance Market to Benefit From Increase in Foreign Investment Limit,” AM Best states that the increase will allow Indian insurers greater financial flexibility in additional capital-raising, and over time, is expected to support a bolstering of the industry’s solvency. Aside from the government’s mandate for control of the companies to remain with resident Indian citizens, which may be a limiting factor for foreign insurers looking to hold majority interest, a specified percentage of profits is also to be retained as a general reserve, which will contribute to the strengthening of companies’ capital positions.