IRDAI authorise insurance companies for investment of 25% to 30% of assets in BFSI sector

The Insurance Regulatory and Development Authority of India increased insurers' maximum investment limit in BFSI companies from 25% to 30% of their assets.

The Insurance Regulatory and Development Authority of India (IRDAI) increased insurers’ maximum investment limit in banking, financial services, and insurance (BFSI) companies from 25% to 30% of their assets. The threshold for financial and insurance actions will now be 30 percent of investment assets for all insurers, according to the most recent modifications to IRDAI’s investment Regulations, 2016. This will include investments in home finance companies and infrastructure finance companies.

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Experts believe that the regulator’s increase will assist insurers in bringing their financial and insurance exposure closer to broader Indian market indexes.
Financial services firms, which include significant banks, non-banking financial organisations (NBFCs), and insurance companies, have a present weightage of roughly 35 percent.
The weightage of financial and insurance companies in broader Indian market indices has consistently increased over the last few years, according to Sampath Reddy, chief investment officer, Bajaj Allianz Life Insurance Co. Ltd.
Insurance companies, according to Reddy, will be able to own a much broader array of varied stocks as a result of IRDAI’s approach.
The increase in investment asset caps from 25% to 30%, according to Mayank Gupta, co-founder and chief operating officer of Zopper, an insurtech startup, is a significant step for insurance companies.