MNC reinsurers, ITI Re work overtime to start ops as they await R3 nod

Five global reinsurers and the lone domestic private sector candidate, ITI Reinsurance, are ready to begin commercial operations as soon as they get final operational licences.

All the companies – Scor Group, Hannover Re, Swiss Re, RGA and Munich Re, as well as ITI – have cleared their second level of regulatory approvals, or R2, and are waiting the final nod (R3 licence) from the regulator to begin operations. One global reinsurer XL Catlin has received R1 licence, while Gen Re has applied for the licence.

The country's first private sector reinsurer ITI Reinsurance, which has also received second round of regulatory nod, is gearing up to start operations.

"We are ready with the capital and are now building our team to start operations from April. We have already brought in Rs 500 crore capital that is required to launch the business. Though other global reinsurers are entering the market, we have better scope as we a domestic company," ITI Reinsurance managing director and chief executive Pradeep Shah told PTI.

French reinsurer Scor Group said it will establish a branch office as soon as it receives R3 authorisation and is expected to start underwriting business from April. It has been dealing with domestic clients since 1973 and had set up a liaison office in 2005.

"Opening a Scor branch this year in the country demonstrates our commitment to this market and we are keen to continue to offer services to clients here," Scor Group chairman and chief executive Denis Kessler said.

The German major Hannover Re has appointed GLN Sarma as its India chief executive and hopes to be operational shortly. With R3 approval, Hannover Re will be able to underwrite life, health and property and casualty business.

Earlier, state-run General Insurance Corporation of India (GIC Re) chairman Alice Vaidyan had said her company did not see any foreign players posing significant competition.

"We will continue to have our dominant market position as we are present here for past 45 years now," Vaidyan said. 

GIC Re rather believes that joining of the new players will bring innovation and increase penetration in the market.

Meanwhile, Insurance Regulatory and Development Authority of India has set up a committee to make a decision on the order of preference in reinsurance cessions, after the new reinsurers start operating here. The committee to be chaired by M Ramaprasad will have members from life, general and health insurance industry as well as representatives from GIC Re, General Insurance Council, Marsh India, Lloyd's and Munich Re.

The committee will also finalise the operational guidelines, including the rights and obligations of all stakeholders, apart from looking at timelines for offer of best terms, order of preference-wise.