Insurance regulator Irdai on Monday gave second round clearances, or R2, to five top foreign reinsurers and the local private sector ITI Reinsurer.
However, UK-based reinsurer XL Catlin has been given first round of regulatory clearance, known as R1.
“Irdai in its board meeting which was held at Hyderabad on Monday has cleared five global reinsurers including Munich Re, Swiss Re, Hannover Re, French major SCOR and world’s largest life reinsurer Reinsurance Group of America (RGA) whereas XL Catlin has been given R1 licence,” said a senior Irdai official.
“All these reinsurers now have to get capital to receive final round of licences, known as R3, to start their branch operations in the country,” he said, adding “ITI Reinsurer has also been given R2 clearance subject to the fact that it brings additional capital of Rs 500 crore to kick off its operations.” They have to bring in Rs 500 crore each and sources point out that the last step will be fulfilled in a matter of week.
“We are ready with the manpower, and capital would start flowing to our Indian operations very soon,” top officials from Munich Re and Hannover Re said.
All these global reinsurers are already doing India business on offshore basis and each has average India portfolio of Rs 800-900 crore.
At present, state-owned GIC Re is the only reinsurer in the country with around 50 per cent of the market share and it enjoys first right to refusal.
The country’s reinsurance market is around USD 2.5 billion and growing at 15-20 per cent per annum.