New Delhi, Oct. 23: After two years of liberalisation, the insurance industry feels that the lack of long-term paper in the market, implications of tax issues pertaining to the life insurance industry, foreign direct investment (FDI) limitations and an unclear role of intermediaries are factors hindering the growth of this sector in India.
In a survey carried out by the Federation of Indian Chambers of Commerce and Industry (Ficci) to explain the current status of the insurance industry, respondents said, “Restrictive regulatory and legal framework, remuneration structure of the agencies and low disposable incomes of a major part of the population are factors restricting the growth.”
On the issue of insurance awareness, only 17 per cent of respondents felt it was “high”, while 58 per cent respondents indicated it to be “medium” and 21 per cent placed it in the “low” category.
Although almost 67 per cent respondents were of the view that tax incentives to a large extent drive insurance sales, they admitted that insurers are “constantly designing awareness campaigns in order to change the psyche of the consumers”.
The survey also highlights that for 71 per cent of respondents, 26 per cent foreign equity for broker ventures was hindering the foreign companies from establishing their bases in India.
Fifty four per cent respondents felt that the IRDA notification of withdrawing 5 per cent discount on the premium for brokers for certain segment of policyholders will have a negative impact on the broker industry.