Reinsurance in India has been under the monopoly of the General Insurance Corporation of India for a long time. It is the only indigenous reinsurance company. Although there have been reforms made to open the market for international companies in recent years, strict measures have been imposed on foreign vendors in order to support local companies.
Let’s have a look at the growth and development of the Reinsurance market in India:
The General Insurance Corporation of India was established as the supervisor of property and casualty insurance, as a result of the nationalization of the non-life market. It regulated the working of the four major national insurance entities: new India, Oriental, National, and United. It then started operating as a reinsurer and the shareholder of these four non-life insurance companies.
The GIC gained its individual identity as a reinsurer after the establishment of the Insurance regulatory and development authority. After the IRDA came into the picture the GIC underwent a solid reorganization. It withdrew itself from the four subsidiaries and became a national reinsurer under the name of GIC Re.
It not just operates in India but also is highly active in other parts of Asia, the Middle East, and Africa. The United Kingdom, Russia, United Arab Emirates, Malaysia, and South Africa, and Brazil are some of the places where the GIC has numerous subsidiaries.
It is quite interesting to know that the GIC contributes immensely to the international income of the country. Its portfolio currently includes 30% of international business. It has been ranked as the 12th most prestigious reinsurance company worldwide and the 3rd in Asia.
The other Indian reinsurance company ITI, received a green signal in December 2016. It would have been the first Indian reinsurer in the private sector if its license would not have been withdrawn in May 2019. Its license was ceased because the company failed to start its business within the given deadlines.
With the opening of the market for foreign players, the growth of reinsurance in India has been remarkable. Currently, 10 foreign reinsurance subsidiaries are operating in India namely, Swiss Re, Munich Re, Hannover Re, Axe Via, XL Cat, Allianz Global, Gen Re, Lloyd’s, and RGA. These foreign competitors hold a share of 19% percent in the reinsurance market of India with the major share still remaining with GIC Re.
The reinsurance market in India has shown immense growth in the past few years. The recent amendments and opening of the market for foreign companies are accountable for the unstoppable growth of the industry.
Although with 80.09% of share that is with a turnover of 510.3 billion INR (6.78 billion USD) GIC still dominates the market, the foreign reinsurers marked a turnover of 126.82 billion INR (1.68 billion USD) constituting 19.19% of market share. This is the data as per the financial report of the year 2020-2021.
The growth of reinsurance in India and also the insurance industry as a whole denotes that more and more people are becoming aware of having a secure future. We hope you’ve safeguarded your future too!
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