India's Insurance Bill: 100% FDI, but Capital Alone Won't Solve Low Penetration

• The Insurance Amendment Bill allows 100% Foreign Direct Investment (FDI) in the Indian insurance sector, up from 74%.
• Despite the FDI boost, the article argues that capital alone won't address India's alarmingly low insurance penetration (life <3%, health <1%).
• Key issues identified include critical gaps in product innovation, distribution efficiency, renewal management, and concerns about mis-selling due to sub-optimal advisory services.
• The mutual fund industry's success, driven by transparency, simplicity, lower expenses, and investor-centric reforms by SEBI, offers valuable lessons for insurers.
• The author suggests focusing on customer-centricity, product clean-up, lower expenses, and ending mis-selling, with IRDAI playing a stronger regulatory role.

Why It Matters: Capital isn't enough; India's insurance sector needs product innovation, transparency, and customer-centric reforms.