Year 2000 – Foreign players allowed 26% stake. Many foreign players entered the market. Most of these foreign players never believed in considering investment income while looking at insurer profitability. The key was to make underwriting profits as soon as possible. Underwriting profit eluded most of the players even after many years. They continued since they were told that even though the present is bleak, the future is bright. They waited for that bright future.
2015: FDI limit increased from 26% to 49%. Existing foreign players didn’t show enthusiasm to immediately increase their stake. Underwriting profits were still eluding them. Yet, some of them still increased their stake to 49% – because they still believed -even though the present is bleak, the future is bright.
2021: FDI limit increased to 74%. Underwriting profits still eluded. Not much enthusiasm to increase stake by foreigners. Some still did-because they believed-even though the present is bleak, the future is bright.
2025-FDI limit increased to 100%. Underwriting profits still eluding. Will this be a gamechanger?
Yes – possible. Just needs the efforts of the big 5 consultancy firms. They could successfully weave the story from the year 2000-Present is bleak, but future is bright.
Come-on big 5 – you are capable – do it for the sake of India.
Postscript- Insurers require many years of good underwriting results to create reserves for the one big Nat cat year when decades of profits will be taken away in that one year.
