Chennai, Jan 8 (IANS) The increase in foreign direct investment (FDI) limit by 23 percent to 49 percent is expected to alleviate the capital pressure on Indian private non-life insurers, global credit rating agency Moody's Investor Service (MIS) said Thursday.
"Increased foreign investment would alleviate the current capital pressure on non-life insurers and add to their buffers against potential investment losses from the volatile capital markets," MIS said in a statement.
Their widened access to foreign capital would also allow them to lower their dependence on domestic funds, MIS added.
According to MIS, Indian private non-life insurers stand to benefit by the government's decision to increase the FDI limit as they are relatively pressured for capital and poor underwriting performance.
"Non-life insurers' financial performance has worsened in recent years as intense competition following its 2007 de-tariffication (the Insurance Regulatory and Development Authority of India removed fixed rate restrictions on all insurance products except third-party motor insurance) led to broad underwriting losses," MIS said.
As a result, the sector's ability to generate internal capital has been undermined.
According to the rating agency, the combined ratio (incurred losses + operating expenses as a percentage of premium) of private non-life insurers was high, between 117.7 percent and 106.4 percent over the past five fiscal years.
The rating agency also said the average solvency margin ratios fell to 200 percent as of the end of September 2014 from 275 percent as of the end of March 2013, versus the regulatory requirement of 150 percent.
There is going to be relief from heat and heat in most of the states of North India. A low-pressu
Yamuna Water Level: The threat of flood in Delhi is averted, but now people are facing a big problem
The danger of floods has been averted due to the decrease in the water level of the Yamuna in Del
Now, as we move toward the euphoria of the results, the Bihar elections have rarely seen such a d
Fit India Dialogue 2020: PM Modi said- My mother often asks if the son eats turmeric or not
Prime Minister Narendra Modi is today interacting with people who influence people for fitness du
Men held for raping Japanese innocent, says family
Patna, Jan 5 (IANS) The family of two brothers arrested for the rape of a 22-year-old Japanese t
Indian Railways: On Holi (Holi special train 2022) If you are also planning to go home or you als
Prime Minister Narendra Modi spoke to Australian Prime Minister Anthony Albanese soon after his E
Defense Ministry again held a press conference today amid nationwide protests over the Agneepath
BJP's resolution in Bihar election: 19 lakh jobs and free corona vaccine
The Bharatiya Janata Party has released its resolution letter for the Bihar assembly elections on
UP Board Exam 2022 Update: Important update for more than 50 lakh high school and intermediate st
