INDIAN INSURANCE SECTOR: A RESEARCH ON THE FEASIBLE ALTERNATIVES FOR RAISING CAPITAL

Author’s Name : Dr  Jyoti Kainth | Dr Priya Gupta | Dr Mansoor Ahmed Beg

Volume 01 Issue 03  ISSN No:  2349-7289  Page no: 1-17

Abstract – The Indian Insurance Sector to continue its tremendous growth needs capital financing to the extent of Rs. 61,000 crores in the next five years. This financing can be made possible by firstly raising the FDI cap from the existing 26% to 49% or secondly by issuing either equity shares or bonds (debt) from the domestic market or thirdly by Financial reinsurance. To start with this paper explained the concept behind these alternatives. To analysis these alternatives qualitative as well as quantitative methods were being used. The analysis of the alternative of raising of the FDI cap has been done on the basis of comments from industry experts and news articles. Quantitative methods like Regression has been used to predict the growth in the insurance sector life insurance premium and the income statements of all the insurance companies have been studied to calculate the cost of equity and debt. Financial Reinsurance analysis has been done based on the various research papers and industry experts’ comments. After analysing all the alternatives it has been concluded that the best alternative for the Indian Insurance Sector in financing its future Capital requirements by Financial Reinsurance.

Keywords –FDI; Financial Reinsurance Analysis;Insurance Premium; Life Insurance Market