LIC demerger, PSU insurer divestment drive 'Insurance for All by 2047'

An expert panel from IIM Kozhikode has put forth a strategic proposal aimed at revolutionizing India's insurance landscape by 2047. Central to this vision is the demerger of the Life Insurance Corporation (LIC) and the divestment of weaker public sector undertakings (PSU) insurers. By splitting LIC, the panel believes it will enhance efficiency and foster a more competitive environment within the industry, laying the groundwork for increased capital inflow and innovation. The proposal suggests that divesting underperforming PSU insurers would inject much-needed vitality into the sector. This move is expected to attract private investments and encourage the entry of new players, thereby expanding the reach of insurance services across the nation. The panel underscores the importance of these reforms in achieving the ambitious target of "Insurance for All by 2047," aligning with India's broader economic and social development goals. Such transformative steps are anticipated to significantly boost insurance penetration, which remains relatively low in India compared to global standards. By fostering a robust and competitive insurance market, the initiative seeks to ensure that every Indian has access to essential insurance services. This strategic overhaul is seen as a pivotal move towards securing financial inclusion and risk protection for the country's vast population, ultimately contributing to a more resilient economy.

— Authored by Next24 Live