The Insurance sector needs to infuse approximately Rs 50,000 crore of capital every year in order to double penetration in the country, Insurance Regulatory and Development Authority of India chairman Debasish Panda said on Friday.
“If we have to double the insurance penetration then every year there is a need to infuse additional Rs 50,000 crore. Some of it will come from existing players itself by way of ploughing back their profits and some of it will have to come as an additional (capital),” Panda said during an insurance and pension summit organized by CII.
However, the amount is a rough estimate which can vary as per the growth in gross domestic product (GDP) and inflation, he said. “These are the assumptions and one needs to see how the GDP will grow, what will be inflation and what will be the world’s GDP. We are trying to do some kind of modeling and roughly if Rs 50,000 crore is pumped into the system then we will be able to double the penetration in 5-7 years time,” he added.
Panda asked insurance companies to come out with more products related to surety bonds where the market is huge.