Insurance regulator Irdai on Wednesday invited US-based insurance companies to invest in the domestic market as the industry offers tremendous growth opportunities alongside liberalised policy regime.

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Indian insurance companies now have greater control over their finances and profitability and it is up to them how and where they want to invest their money, Insurance Regulatory and Development Authority of India (Irdai) Chairman Debashish Panda said in a virtual session to enhance India-US economic partnership in the insurance sector.

"We have rationalised the management of expenses and left it to companies to decide how and where they want to spend. We don't want to put a cap on everything, such as commission, reward payment, salaries and so on. These have been left to the boards of the companies.

"If you look at the private Indian insurers, we see that there is a higher return on equity (ROE) on average compared to the American insurers. So again, there is tremendous potential for the American companies to come and invest in India," Panda said.

Drawing a comparison, he said the Indian private sector insurance companies have ROE averaging around 23 per cent as against 13 per cent for the American companies.

"If we factor the risks, even then the number will be higher by about 500-600 bps than the US insurers," he added.

Talking about the number of US-based insurance companies who are present in India out of the 50 major insurers, he said there are only 4 such companies against 10-14 in other Asian countries.

China has 14 out of 50 American insurance companies, Singapore has 14 out of 50, Hong Kong 13 out of 50, Indonesia has 10 out of 50, while Malaysia and Thailand have 9 out of 50 each. 

Whereas India has only 4 out of 50 companies -- AIG, Liberty Mutual Insurance, MetLife and Cigna.

"So, my appeal to the American friends is (that) now is the time to come and invest here in India. The FDI regime has been liberalised, the regulatory regime has been looking forward to shake hands and taking you through this journey, this is the time India is poised to grow....Tremendous opportunity and potential for the insurance sector to grow," Panda said.

He said India's vision is to have Insurance for All by 2047.

The gross written premium (GWP) has grown from USD 69 billion in 2017 to USD 115 billion in 2022 and the vision is to take it to USD 500 billion by 2047, he said.

Also, in terms of premium to GDP ratio, India wants to grow to 8-10 per cent by 2027.The premium to GDP ratio stood at 3.7 per cent in 2017 and reached 4.2 per cent in 2022.