What is the story about?
The Union Cabinet’s likely approval of changes to the proposed Insurance Laws (Amendment) Bill is expected to reshape India’s insurance sector over the medium to long term, even as industry executives caution that the immediate impact on penetration and growth may remain measured.
The legislation proposes amendments to the Insurance Act, the LIC Act and the IRDAI Act, including a provision to raise the foreign direct investment (FDI) cap in insurance companies to 100%.
The government continues to aim to introduce the legislation during the ongoing Winter Session of Parliament, according to people familiar with the matter.
FDI reform seen as enabling, not disruptive
Executives say the move to allow 100% foreign ownership improves capital access and strategic flexibility, but does not automatically translate into rapid market expansion.
Kamlesh Rao, MD & CEO of Aditya Birla Sun Life Insurance, said, “Opening up the sector to 100% FDI will certainly be a welcome and progressive step… Any move that broadens the industry’s innovation horizon is positive for long-term penetration.” However, he added that India’s insurance market remains structurally different, noting, “Even when FDI moved from 51% to 74%, penetration didn’t change meaningfully… growth has been built over decades on the strength of deeply-entrenched distribution ecosystems.”
Rushabh Gandhi, MD & CEO of IndiaFirst Life Insurance, echoed a similar view, saying, “The Cabinet’s approval for 100% FDI in insurance is a welcome structural reform… However, the near-term impact on business growth may remain modest.”
He added that life insurance continues to be a distribution-led market where scale depends on local networks and partnerships.
Debashish Banerjee, Partner at Deloitte India, said the Cabinet nod helps translate policy intent into action.
“Over the past few months, we have seen growing interest from several global insurers who are actively evaluating India as a long-term market, and greater clarity on ownership norms will help in moving those conversations forward,” he said, adding that investor confidence will depend on how detailed rules and operational guidelines evolve.
Technology, competition and consumer impact
Industry leaders expect higher foreign participation to support investment in technology, underwriting capacity and product development.
Sanjay Kedia, CEO of Marsh McLennan India, said, “The government’s move to permit 100% FDI in insurance represents a transformative step for India’s risk and protection landscape.”
He added that the reforms could lead to “deeper insurance penetration, product innovation, and stronger underwriting capacity.”
Rishi Mehra, CEO (India) and Head of Strategy, Human Capital, Asia Pacific at Aon, said, “Allowing 100% FDI in insurance is a pivotal step toward strengthening India’s risk and insurance ecosystem.”
The legislation proposes amendments to the Insurance Act, the LIC Act and the IRDAI Act, including a provision to raise the foreign direct investment (FDI) cap in insurance companies to 100%.
The government continues to aim to introduce the legislation during the ongoing Winter Session of Parliament, according to people familiar with the matter.
FDI reform seen as enabling, not disruptive
Executives say the move to allow 100% foreign ownership improves capital access and strategic flexibility, but does not automatically translate into rapid market expansion.
Kamlesh Rao, MD & CEO of Aditya Birla Sun Life Insurance, said, “Opening up the sector to 100% FDI will certainly be a welcome and progressive step… Any move that broadens the industry’s innovation horizon is positive for long-term penetration.” However, he added that India’s insurance market remains structurally different, noting, “Even when FDI moved from 51% to 74%, penetration didn’t change meaningfully… growth has been built over decades on the strength of deeply-entrenched distribution ecosystems.”
Rushabh Gandhi, MD & CEO of IndiaFirst Life Insurance, echoed a similar view, saying, “The Cabinet’s approval for 100% FDI in insurance is a welcome structural reform… However, the near-term impact on business growth may remain modest.”
He added that life insurance continues to be a distribution-led market where scale depends on local networks and partnerships.
Debashish Banerjee, Partner at Deloitte India, said the Cabinet nod helps translate policy intent into action.
“Over the past few months, we have seen growing interest from several global insurers who are actively evaluating India as a long-term market, and greater clarity on ownership norms will help in moving those conversations forward,” he said, adding that investor confidence will depend on how detailed rules and operational guidelines evolve.
Technology, competition and consumer impact
Industry leaders expect higher foreign participation to support investment in technology, underwriting capacity and product development.
Sanjay Kedia, CEO of Marsh McLennan India, said, “The government’s move to permit 100% FDI in insurance represents a transformative step for India’s risk and protection landscape.”
He added that the reforms could lead to “deeper insurance penetration, product innovation, and stronger underwriting capacity.”
Rishi Mehra, CEO (India) and Head of Strategy, Human Capital, Asia Pacific at Aon, said, “Allowing 100% FDI in insurance is a pivotal step toward strengthening India’s risk and insurance ecosystem.”
