Kolkata, July 6 (IANS) Indian insurers should look overseas and expand their international footprints, the insurance regulator suggested Friday.
"This is time now when our homegrown insurers should look at overseas countries both in terms of acquisitions and opening branches there," Sudhin Roy Chowdhury, member (Life), Insurance Regulatory Development Authority (IRDA), said here at an insurance summit organised by the Indian Chamber of Commerce.
Chowdhury observed that if foreign players could join hands with Indian insurers, the domestic insurers should also look at foreign countries in order to expand their business.
Responding to Chowdhury's suggestion, Kshitij Jain, ING Vysya Life Insurance Company managing director, said the domestic insurers might face capital constraints to acquire companies abroad.
The IRDA member's suggestion came amid reports that the government may consider raising FDI limit in the insurance sector to 49 percent from the existing 26 percent. As per the current regulation, a foreign player cannot have more than 26 percent stake in an insurance company in India.
Many foreign players in recent months have either exited the Indian operation or are mulling to do so.
US-headquartered New York Life recently exited the India insurance business after its 10-year-long association with Max India.
Tata AIG Life Insurance became Tata AIA Life Insurance Company following the exit of American International Group (AIG) from the HongKong-based insurer AIA Group. Tata AIG was set up in 2001 as a joint-venture between the Indian conglomerate Tata Group and AIG.
Reports have also surfaced that Dutch major ING Insurance International is set to make an exit from Indian insurance industry. The company holds 26 percent stake in ING Vysya Life Insurance Company.
Jain, however, said ING was planning to shut operations in Asia but India was not under that plan.
"A press statement was released regarding Asia exit, but as of now no such plans are there for the Indian operations," Jain, told reporters on the sideline of the event.
Jain, however, said many global insurance giants had exited the Indian operation mainly because of the structural problems in their respective domestic markets.