IAG appears to have timed its run into India’s insurance market nicely following recent agreement by Indian cabinet ministers to lift maximum foreign direct investment limits from 26% to 49%.

International reports claim India needs more foreign investment to improve ageing infrastructure throughout the country.

IAG is currently finalising a joint insurance venture with the State Bank of India which gives it access to 100 million customers through 10,000 branches.

The Australian insurer agreed a maximum 26% stake in the venture, but if the Indian Government ratifies the Cabinet decision IAG could extend its stake to almost half of the venture.

The Indian general insurance sector has grown at an annual rate of 14% over the past five years, and looks a much brighter venture for IAG than its ill-fated venture into the saturated UK market.