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The New India Assurance Company zoomed 11.85 per cent, General Insurance Corporation of India jumped 8.78 per cent and ICICI Prudential Life Insurance Company gained 6 per cent on BSE.
Further, HDFC Life Insurance Company gained 5.19 per cent, ICICI Lombard General Insurance Company gained 3.96 per cent and SBI Life Insurance Company 3.74 per cent.
“Raising FDI in insurance from 49 per cent to 74 per cent is welcome. Market response to the budget reflects growth optimism,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
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In the Union Budget 2021-2022, Finance Minister Nirmala Sitharaman also said investor charter would be introduced as a right of all financial investors across all financial products.
She proposed to amend the Insurance Act 1938 to “increase the permissible FDI limit from 49 per cent to 74 per cent in insurance companies and allow foreign ownership and control with safeguards”.
“I propose to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49 per cent to 74 per cent in insurance companies and allow foreign ownership and control with safeguards,” she said while presenting the Budget 2021-22.
She also said that for investor protection, an investor charter would be introduced as a right of all financial investors across all financial products.
It was in 2015 when the government hiked the FDI cap in the insurance sector from 26 per cent to 49 per cent.
Life insurance penetration in the country is 3.6 per cent of the GDP, way below the global average of 7.13 per cent, and in case of general insurance, it is even worse at 0.94 per cent of GDP, as against the world average of 2.88 per cent.
The government has earlier allowed 100 per cent foreign direct investment in insurance intermediaries.
Intermediary services include insurance brokers, reinsurance brokers, insurance consultants, corporate agents, third party administrators, surveyors and loss assessors.