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Increased FDI to boost health insurance business

Increased Foreign Direct Investment to boost health insurance business

Apnainsurance Research Bureau

05 Nov 2008

Foreign Direct Investment (FDI) is expected to boost the health insurance sector, which is already registering a high growth rate. An Ernst & Young study estimates that half of the Indian population is expected to be covered by health insurance in the next seven years.

The study estimates that the health insurance premium income is likely to touch Rs 30,000 crore in 2015 from the existing Rs 4,000 crore.

Industry experts say the government's proposal to scale up FDI in the insurance sector from 26 per cent to 49 per cent will be a major booster for the business.

The premium was Rs 670 crore in FY02.

The committee on health insurance has submitted its report to insurance Regulatory and Development Authority (IRDA) suggesting with reference to reduction in capital, transformation of health providers into stakeholders in health insurance companies to prevent over-treatment and encouragement of regional health insurance companies in comparision with pan-India ones.