The Indian reinsurance industry has seen a sharp rise during the last three years, and is expected to reach INR579.4bn (US$7.8bn) in 2024 in terms of premiums, says data and analytics company GlobalData.
Reinsurance premiums in India grew to INR429.7bn (%5.7bn) in 2019 from INR234.9bn in 2016, at a compound annual growth rate of 22.3%.
The growth has coincided with changes in market entry rules by the IRDAI in 2015, allowing foreign reinsurers to set up branch offices. Till then, GIC Re had a monopoly in the reinsurance market.
Mr Shabbir Ansari, GlobalData insurance analyst, said that regulatory changes helped offshore reinsurers increase their market share from 0.2% in 2016 to 24% in 2019.
“Regulatory amendments were introduced in 2018 to increase competition by allowing foreign reinsurers’ branches (FRBs) to bid for contracts, “ he said. Before then, foreign reinsurers could only bid in cases where the proposed business was rejected by GIC Re, he added.
GIC Re is facing decline in its home market. While it still has the first right of refusal for all reinsurance contracts, by matching or improving on FRB quotes, there are expectations that this could also be removed, says GlobalData.