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Insurance Stocks Gain As Govt Considers Raising FDI Limit in Insurance Companies

Professor of Financial Economics and Part-time Value Investor, Transfin.
Dec 10, 2019 12:31 PM 2 min read

Insurance stocks gain as Govt considers raising FDI limit in insurance companies.



Why do insurance companies add premium charge for tobacco users.

Smoking Can Cost You Heavily: As per the World Health Organization (WHO), Indians account for over 12% of the world’s smokers. With the repercussions of smoking being rather well-known, life insurance companies also actively try to hedge themselves from the higher risk by increasing rates for tobacco users. 


Many insurers consider the higher risks associated with smoking when adding a premium charge for tobacco users.


Click here for a useful comparison between the premiums of a smoker vs a non-smoker by three leading insurers providing term insurance of INR1cr life cover for a 30-year-old, covering age till 70 years.


Applying for a health insurance? Here is a handy primer of some baffling health insurance terminologies.

Insurance stocks gain as Govt considers raising FDI limit in insurance companies.

Cheers of Joy: Share prices of insurance companies today hiked 2-8% on the back of news that the government is considering raising the limit for foreign direct investment (FDI) in insurance companies to 74%. 


Currently, FDI in the insurance sector is capped at 49% under automatic route, including for insurance broking, insurance companies, third party administrators, surveyors, and loss assessors. 


Hit Refresh: Finance Minister Nirmala Sitharaman in the July budget had announced that the government will examine suggestions from various stakeholders to further open up FDI in the insurance sector. ET Insure


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