The Indian insurance sector has a total of 52 insurance companies, of which 28 are in non-life insurance business and 24 in life insurance. India's life insurance sector is the biggest in the world with about 360 million policies and is expected to increase at a compound annual growth rate (CAGR) of 12-15 per cent over the next five years. The insurance industry plans to hike penetration levels to five per cent by 2020, and could top the US$ 1 trillion mark in the next seven years.
The industry is set to reach further heights, because of the proposal to permit FDI in insurance to 49 % from current 26%. The Insurance Regulatory Development Authority (IRDA) believes that the country's insurance sector needs capital infusion of Rs 50,000 crore (US$ 8.08 billion) to expand reach,
GIC RE, the state-owned company and the only reinsurer has become fully operational in India. Though as 6-7 reinsurers have applied for license, they are yet to begin operations in India. Only state-owned reinsurer GIC Re is fully operational within the country. Some of the global re-insurers that have approached the insurance regulator for a licence to open their branches in the country are Munich Re, Swiss Re, SCOR, Hanover Re, and XL Catlin, among others. After announcing norms on reinsurance regulations in November last year, the insurance regulator gave its initial approval, known as R1 in regulatory parlance, to global players like Munich Re, Hannover from Germany, Swiss Re from Switzerland and French major SCOR, in March this year.