This is a major gamble for the government. There are different voices, including that of the powerful finance ministry, which is convinced that a free insurance sector would be able to tap large amounts of domestic savings and channel them into infrastructure development. The risk is that the private insurers might fall short of expectations, as has happened with private telecommunications operators who suddenly found that their projections about market growth had gone awry. The government has been taking two steps forward and one step backward. This is seen as a major hurdle by the industry.
More partners can cause a lot of confusion.
Market Profile India, with a population of 1 billion, has been a small insurance market controlled by the two monopolies, which have made little effort to tap their full potential. Most observers and prospective investors expect the potential to be realized once the industry is opened to competition. This contrasts with 30 insurance companies in Taiwan serving a population of 20 million and 33 companies for South Korea s 46 million people. Eager to Enter Foreign insurers, waiting in the wings for five years, seem to be more than confident about their own abilities and the potential of the market. At least 40 foreign companies are ready to enter the Indian market.