...This article provides information about the role of FDI in Insurance Sector! Even after the liberalisation of the insurance sector, the public sector insurance companies have continued to dominate the insurance market, enjoying over 90 per cent of the market share. FDI is the process whereby residents of one country acquire ownership of assets for the purpose of controlling the production, distribution and other activities of a firm in another country. A major role played by the insurance sector is to mobilize national savings and channelize them into investments in different sectors of the economy. FDI in insurance would increase the penetration of insurance in India; FDI can meet India’s long term capital requirements to fund the building of infrastructures. Insurance sector has the capability of raising long-term capital from the masses, as it is the only avenue where people put in money for as long as 30 years even more. An increase in FDI in insurance would indirectly be a boon for the Indian economy. The insurance sector has also been fast developing with substantial revenue growth in the non-life insurance market. Over the years, FDI inflow in the country is increasing. However, India has tremendous potential for absorbing greater flow of FDI in the coming years. The role of Foreign Direct Investment in the present world is noteworthy. It acts as the lifeblood in the growth of the developing nations. The wave of liberalisation and globalization sweeping across the...
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...INVESTMENT IN INDIA ITS IMPACT ONBANKING AND INSURANCE SECTOR Introduction to topic Foreign direct investment is investment made by a foreign individual or company in productivecapacity of another country. It is the movement of capital across national frontiers in a manner that grants the investor control over the acquired asset. A parent business enterprise and itsforeign affiliate are the two sides of the FDI relationship. Together they comprise an MNC. The parent enterprise through its foreign direct investment effort seeks to exercise substantial controlover the foreign affiliate company.Foreign direct investments (FDI) are investment of foreign assets into domestic structures,equipments and organization. FDI reflects the objectives of obtaining a lasting interest by aresident entity in one economy (Direct Investor) in entity resident in an economy other than thatof the Investor (Direct investments enterprise). The lasting interest implies the existing of a long-term relation between the direct investor and the enterprise and a significant degree influence onthe management of the enterprise. Direct investment involves both the initial transaction betweenthe two entities and all the subsequent capital transactions between them and among affiliatedenterprises, both incorporated and unincorporated. Problem Statement In today¶s economy FDI plays an important role in a each sector. So it is important to understandthe concept and trends of FDI, therefore in this study an attempt...
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...FDI In Insurance INTRODUCTION With the deregulation of insurance industry in India since 1999, private players have got an opportunity to enter in an insurance markets. Prior to its deregulation, the life insurance business was dominated by the public sector company is life insurance Corporation of India. While liberalization of insurance sector, as many as twelve new private life insurance companies were entered with the help of foreign equity up to 26 per cent in the life insurance business apart from the HDFC standard life, which has stand foreign equity only 18.6% in the beginning of insurance business, in the present time there are entire 22 private life insurance companies operating business in India, their in we have selected five private life insurance companies, as like ICICI prudential life insurance (2000), HDFC standard life (2000), Aviva life (2002), SBI life insurance (2001), TATA life insurance (2001). They are entire companies is playing a vital role in life insurance business with motive for exist and prospective customers to provide better facilities in lives saving scheme, future security, investment plan, funds investment etc. Consequently, the public-sector company has been face towards countering the challenges posed by the entered new players in the same business. The private players have been striving to build confidence in customers and get a foothold in the markets. In competitive markets, life insurance companies come out...
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...International Investment in Insurance Services in the US By Christopher Chan (z3329864), Chun Kin Kwok (z3308661), Jay Jung (z3331738) Abstract This paper proposes several determinants of FDI in insurances services in the US and then examines its relationship and significance to FDI inflows in insurance services by an Ordinary Least Squares (OLS) regression. The regression found that a higher US wage rate discourages FDI in insurance services. However, it also shows that FDI in manufacturing and insurance services complement each other. Thus, the foreign acquisition of US manufacturing assets may have contributed to the almost fourfold increase of FDI inflows in insurance services between 1987 and 1998. 1) Introduction Since the 1980s, many foreign firms have seen the US as a relatively attractive destination for direct investment. Foreign direct investment (FDI)1 allows investors to exert a significant influence on the host country. It creates a global marketplace in which firms from one country are operating another firm in a totally different environment. The US has undergone a major process of restructuring and deregulation that has encouraged this type of investment. In 1998, US FDI inflows accounted for 30% of worldwide FDI inflows (US $193 billion) with the second largest host country (the UK) a distant US$130 billion behind. The dot com bubble in the 90s spurred the nearly doubling of FDI levels in the US in 1998 as overseas firms were eager to tap into the expanding...
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...“The effects of FDI on the Indian Insurance Industry” Abstract Chapter-1 1.1 Introduction In the world of increased competition and rapid technological changes, globalization has played a complimentary role over the past years. Globalization has encouraged more and more multinationals to adopt FDI. According to Charles W.L. Hill (1998) “FDI occurs when a firm invests directly in facilities to produce and market a product in a foreign country”. The growth of FDI is more than the growth of world trade and world output so role played by FDI in world economics is very vital. Patterson, N. and Montanjees, M. (2004) say that FDI is the most favoured form of external finance for the reason that it is non-debt creating, non- volatile and the outcome depends upon the projects performance initiated by investors. FDI is advantageous because it facilitates international trade and transfer of technology, knowledge and skills. The purpose of this study is to investigate factors that attract FDI. De Mello (1999) asserts that scope for business in a country, opportunities for expansion, market size etc are some of the factors that attract FDI. Growth rate of a company or an industry leads to magnetism of more and more investment as investors know that their investment is safe enough. According to Dunning, J. (1981) Availability of valuable and unique resources in an industry such as cheap production capacity, cheap skilled labour and advanced technology which are necessary for running...
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...iosrjournals.org Contribution of Insurance Sector to Growth and Development of the Indian Economy 1 1 2 Dr. M.Subba Rao, 2R. Srinivasulu M.Com, M.Phil, Ph.D Principal Sri Balaji P.G College (MBA) Anantapur – 515002 Andhra Pradesh - India M.Com, M.B.A Research Scholar Department of Commerce S.K University – Anantapur Andhra Pradesh India Abstract: For economic development, investment are necessary, investments are made out of savings. Insurance Company is a major instrument for the mobilization of savings of people particularly from the middle and lower income groups. These savings are channelized into investment for economic growth. Insurance serves a number of valuable economic functions that are largely distinct from other types of financial intermediaries. According to the official estimates, Indian economy is expected to grow at 7.6% (+/- 0.25%) in the fiscal year 2012–2013. However, leading financial organizations and economic think-tanks expect Indian economy to grow slower than official projections. The economy of India is the tenth-largest in the world by nominal GDP and the third largest by purchasing power parity (PPP). The country is one of the G-20 major economies and a member of BRICS. On a per capita income basis, India ranked 140th by nominal GDP and 129th by GDP (PPP) in 2011, according to the IMF. Fortunately, in the past few years, several interesting lines of research have begun to map the specific contributions of insurance to the economic growth process...
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...SVKM’S NMIMS SCHOOL OF LAW A Project Submitted On Law And Morality And Its Interrelations To Be Submitted To- Ms. Nanda Pardhey Submitted by – Kunal Paleja B.B.A L.L.B(Hons) Roll No- A044 ACKNOWLEDGEMENT “Man cannot find a new ocean unless he has courage to lose sight of the shore”- Andre Gilde I take this opportunity to extend my sincere thanks to NMIMS School of Law offering a unique platform to garner knowledge in the subject of Jurisprudence. I wish to extend my sincere and heartfelt gratitude to my subject guide Professor Nanda Pardhey who guided, supported and encouraged me during the entire tenure of the project. I would also like to offer my thanks for her valuable advices throughout the course of my project. Also I would like to take this opportunity to thank all the faculty members present in the library. I am glad that I can say it with conviction that I have immensely benefited from the allotment of this topic. Contents S. No. Topic Page 1. Abbreviations 2. Table of Cases 3. Table of Statutes 4. Research Methodology 5. Introduction 6. Jurisprudential Study 7. Analysis on Indian Legal Provisions 8. Comparative Study 9. Conclusion 10. Suggestions 11. Bibliography Table of Abbreviations Sr.No Keyword Meaning 1 SC Supreme Court 2 HC High Court 3 IPC Indian Penal Code 4 Sec Section 5 v versus 6 www World wide web 7 i.e That is 8 etc Etcetera Table of Cases and Statutes ...
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...Culture represents the beliefs, ideologies, policies, practices of an organization. It gives the employees a sense of direction and also controls the way they behave with each other. The work culture brings all the employees on a common platform and unites them at the workplace. There are several factors which affect the organization culture: * The first and the foremost factor affecting culture is the individual working with the organization. The employees in their own way contribute to the culture of the workplace. The attitudes, mentalities, interests, perception and even the thought process of the employees affect the organization culture. Example - Organizations which hire individuals from army or defence background tend to follow a strict culture where all the employees abide by the set guidelines and policies. The employees are hardly late to work. It is the mindset of the employees which forms the culture of the place. Organizations with majority of youngsters encourage healthy competition at the workplace and employees are always on the toes to perform better than the fellow workers. * The sex of the employee also affects the organization culture. Organizations where male employees dominate the female counterparts follow a culture where late sitting is a normal feature. The male employees are more aggressive than the females who instead would be caring and softhearted. * The nature of the business also affects the culture of the organization. Stock broking...
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...Foreign Direct Investment in the Insurance sector in India. India has been rapidly adapting to the liberalization, and FDI is encouraged in almost all the economic activities. FDI inflow in the country is increasing. India has tremendous potential for absorbing greater flow of FDI in the coming years. The Insurance sector in India has a great potential even during the downtrend and FDI flow is expected to rise in the mere future. The performance of the Insurance Regulatory and Development Authority (IRDA) Act by the Indian Parliament in 1999 opened the entry for participation of private insurance companies and a limited participation of foreign insurance companies through joint ventures with Indian company. Life Insuranceis the fastest growing sectorin Indiasince 2000 as Government allowed Private players and FDI up to 26%. Keywords: FDI in insurance sector, Insurance Regulations, FDI advantages, FDI Disadvantages, Life Insurance market, FDI cap on Insurance. Introduction: The insurance sector has been a fast developing sector with substantial revenue growth in the non-life insurance market, but in spite of its huge population, India only accounts for 3.4% of the Asia-Pacific general insurance market's value. The cap on foreign companies equity stake in insurance joint venture is 26%, but is expected to rise to 49%. The investment pattern with regard to foreign direct investment (FDI) and inflows from non-resident Indians remains resilient and FDI inflows into the country grew...
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...FDI – A Foreign direct investment (FDI) is a controlling ownership in a business enterprise in one country by an entity based in another country. Foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations. Investments can take place for many reasons, including to take advantage of cheaper wages, special investment privileges (e.g. tax exemptions) offered by the country. India is the third most attractive foreign directinvestment destination in the world. Types— Horizontal FDI arises when a firm duplicates its home country-based activities at the same value chain stage in a host country through FDI.[4] Platform FDI Foreign direct investment from a source country into a destination country for the purpose of exporting to a third country. Vertical FDI takes place when a firm through FDI moves upstream or downstream in different value chains i.e., when firms perform value-adding activities stage by stage in a vertical fashion in a host country.[4 Mauritius, Singapore, US and UK were among the leading sources of FDI. Why countries seek FDI? Domestic capital is inadequate for purpose of economic growth; Foreign capital is usually essential, at least as a temporary measure, during the period when the capital market is in the process of development; Foreign capital usually brings it with other scarce productive factors like technical know how, business expertise and knowledge. A coin...
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...FDI IN INSURANCE & PENSION ECONOMIC ANALYSIS OF INDIAN SCENARIO PROJECT SYNOPSIS Leading Newspaper The Times of India reported on October 4th, 2012, “Big Bang reforms: Cabinet approves 49% FDI in insurance, 26% in pension sector”. This has indeed been a big bang reform announcement post FDI in multi brand retail by the Gov. of India. In light of this our group has tried to weigh the topic in Economic terms. The synopsis of our project on this topic has been discussed henceforth in the document. INTRODUCTION The Gov. of India has allowed 49% FDI in Insurance and 26% in Pension sector. This move permits foreign shareholding in insurance companies to the extent of 49% and to 26% in pension companies with an aim to provide better insurance coverage and to augment the flow of long term resources for financing infrastructure. The Insurance sector was opened up for private sector in 2000 after the enactment of the Insurance Regulatory and Development Authority Act, 1999 (IRDA Act, 1999). The industry has been demanding for long to increase the FDI limit for adequate funds for expansion of the sector. IRDA Chairman J Hari Narayan recently favored up to 49 per cent foreign investment in the sector. SIGNIFICANCE When a firm controls (or have a strong say in) another firm located abroad, e.g. by owing more than 10% of its equity, the former is said "parent enterprise" (or "investor") and the latter "foreign affiliate". Foreign Direct Investment (FDI) is the financial investment...
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...2013) ISSN: 2249-7382 ANALYSIS OF FDI IN INSURANCE SECTOR IN INDIA Yogita Sharma* ABSTRACT There is hardly a facet of the Indian psyche that the concept of ‘foreign’ has not permeated. This term, connoting modernization, international brands and acquisitions by MNCs in popular imagination, has acquired renewed significance after the reforms initiated by the Indian Government in 1991. Generally speaking FDI refers to capital inflows from abroad that invest in the production capacity of the economy and are “usually preferred over other forms of external finance because they are non-debt creating, non-volatile and their returns depend on the performance of the projects financed by the investors. FDI also facilitates international trade and transfer of knowledge, skills and technology. “Foreign direct investment is of growing importance to global economic growth. This Paper mainly focus on the Foreign Direct Investment in the Insurance sector and its significance in insurance sector in India . The Insurance sector in India has a great potential even during the downtrend and FDI flow is expected to rise in the mere future. This paper attempt to current status of fdi in insurance sector in India. Currently, only 26% of FDIs is permitted in insurance sector. The total insurance business would touch US$ 60 billion size. If insurance sector is opened up to an extent of 49% for FDIs, it is expected that FDI’s contribution to insurance business would touch nearly US$ 2 billion...
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...This article provides information about the role of FDI in Insurance Sector! Even after the liberalisation of the insurance sector, the public sector insurance companies have continued to dominate the insurance market, enjoying over 90 per cent of the market share. FDI is the process whereby residents of one country acquire ownership of assets for the purpose of controlling the production, distribution and other activities of a firm in another country. Role of FDI Image Courtesy : independent.com.mt/uploads/media/SCX.jpg A major role played by the insurance sector is to mobilize national savings and channelize them into investments in different sectors of the economy. FDI in insurance would increase the penetration of insurance in India; FDI can meet India’s long term capital requirements to fund the building of infrastructures. Insurance sector has the capability of raising long-term capital from the masses, as it is the only avenue where people put in money for as long as 30 years even more. An increase in FDI in insurance would indirectly be a boon for the Indian economy. The insurance sector has also been fast developing with substantial revenue growth in the non-life insurance market. Over the years, FDI inflow in the country is increasing. However, India has tremendous potential for absorbing greater flow of FDI in the coming years. The role of Foreign Direct Investment in the present world is noteworthy. It acts as the lifeblood in the growth of the developing...
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...Investment in Life Insurance Companies * Kishor Kumar Meena * Management, Jaipur National University, Jaipur A B S T R A C T The Insurance sector reforms have open in the door for private play-ers, private insurance companies in the beginning of life insurance bus-iness with public sector company (LIC). Foreign Direct Investment (FDI) has allowed in private life insurance companies in India, under an act of IRDA with a limit of foreign equity of 26%.The life insurance sector is playing a pivo-tal role in both Indian and Global markets.Those factor we have taken for the analysis of private life insurance companies performance are premium growth, market share of the companies, portfolio Invest-ment, equity share capital etc. It is use for a measure of positive or negative impact of FDI investment in Indian private life insurance co-mpanies. It has investigated for a sample of five selected private life insurance companies and one pub-lic company for the purpose to co-mparison with selected companies it is using a panel data for analysis in between the period of 2002-10. Different key variable is use to an-alysis yearly premium income, infr-astructure development, employee facilities, business expansion etc. it was examined to identify cause for any significant impact on the life insurance sector. The study has made use of secondary data from different authenticated source to draw a meaningful conclusion. August , 2011 INTRODUCTION With the deregulation of insurance industry in...
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...Literature Review The purpose of this study is to get an in depth understanding of the insurance industry to understand what could be the impact of FDI on Indian insurance industry. To strengthen this study and get in-depth understanding of the variables that could impacted due to FDI a review of the past research has been done in this section. An empirical study by (Li, Donghui; Moshirian, Fariborz; Sim, Ah-Boon, 2003) done on the U.S. insurance sector concludes that FDI contributes significantly to the volume of trade. This prompted studies to identify what are the important and significant variables that attract FDI in insurance. There have been many papers published that study the factors that lead to participation of in international insurers in a country’s insurance sector. A study by (Li & Moshirian, 2004) of the US insurance services for the period 1984-1998 tries to identify factors that increases the desirability for FDI in insurance. The major factors that this study identifies are national income, relative cost of capital, relative wage rate, total trade in insurance services, exchange rate volatility, FDI in banking, source country’s insurance market size and the financial development of the host country. Other studies that intend to find determinants that attract foreign participation in insurance market include study by (Ma & Pope, 2003) .The study reveals that major foreign market characteristics that determine international insurers participation...
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