American insurer MetLife is keen on raising stake in its Indian venture to up to 49 per cent as and when the government revises the cap on foreign holding in the sector.
"If the Indian government decides to raise the cap on foreign investment in insurance companies, MetLife International would definitely invest more in India. India is a growth engine for MetLife in the future," said MetLife India Insurance Company Managing Director Rajesh Relan.
Under the present regulation, a foreign firm is allowed to have 26 per cent stake in an insurance venture.
MetLife India Insurance Company incorporated in 2001 is a joint venture between MetLife Inc, Jammu and Kashmir Bank, M. Pallonji and Co. Pvt Ltd and other private investors.
A bill to amend Insurance Laws to raise the FDI limit to 49 per cent from existing 26 per cent is pending in Rajya Sabha and the issue would be taken up by the Upper House after receipt of the report of the Standing Committee.
"We would expect the new government at the Centre to continue with the financial reforms to further liberalise the insurance sector. The government should push forward the Insurance Amendment Bill as it will provide the much needed impetus to the sector," he said.
Relan said a hike in the sectoral FDI cap to 49 per cent would further strengthen the insurance sector as it would help increase penetration of insurance, improve financial inclusion, improve employment, boost realty, generate demand for IT and ITES and health care diagnostic services.
MetLife currently has 192 offices in 131 cities across the country.
So far, the sector has attracted foreign direct investment worth Rs 28,000 crore.
The industry is expected to attract additional Rs 25,000 crore, provided the FDI cap is increased to 49 per cent.
Such a huge inflow would have significant positive impact on the GDP and at the same time take care of the fiscal deficit concern, said an analyst.
Besides MetLife International, many foreign companies including New York Life have evinced interest in raising their stake in their respective insurance joint ventures.
Earlier this month, Max India had said it would sell additional 23 per cent to its life insurance venture partner New York Life (NYL) of USA subject to regulatory condition.
Currently, NYL holds 26 per cent in Max New York Life. As per the present regulatory guideline, a foreign partner cannot have more than 26 per cent in an insurance venture.
