With more reinsurers making a foray, India on way to emerge as global reinsurance hub
Soon, at least half a dozen global reinsurers are expected to enter the India insurance market. It is expected to quadruple from its current size of $60 billion over the next 10 years.
The Insurance Regulatory and Development Authority of India (IRDAI) has allowed more foreign re-insurers to open branches in India in a move that is set to challenge the monopoly of state-run General Insurance Corporation of India (GIC Re), which is the sole reinsurance company in the Indian insurance market.
Leading global reinsurers – Switzerland-based Swiss Re, France-based Scor SE, two Germany-based reinsurers Hannover Re and Munich Re and RGA Life Reinsurance Company of Canada – have been recently granted certificates of registration by the IRDAI.
UK-based reinsurer Lloyd’s is also making its India foray in early 2017 after receiving the approval from the insurance regulator. However, unlike other reinsurers, Lloyd’s will operate in India through its market model wherein a set of members collectively come together to underwrite and provide reinsurance.
Commenting on the move, Hannover Re CEO Ulrich Wallin said: “I am delighted about the opening up of the Indian market for (re)insurers. The establishment of our branch means that we can now be even closer to our customers and respond more attentively to their reinsurance needs.”
Meanwhile, Thomas Mathew, CEO of RGA India, said: “We believe the Indian insurance market has tremendous potential to grow and We look forward to supporting this growth through innovative products in life and health insurance.”
Several offshore players applied for the license to set up branch operations in India after the Insurance Laws (Amendment) Act, 2015, permitted foreign reinsurers to have a branch presence in the country.