Lloyd's eyes local foray

World's largest insurance market Lloyd's today evinced interest to enter India's booming insurance and reinsurance sectors for which it wants government to amend the rules.

"We are interested in both direct insurance and reinsurance," Lloyd's chairman Lord Peter Levene, said. However, he said Indian legislations permit only foreign companies to enter the insurance sector with an Indian partner.

"Even if we are willing to form a joint venture, the legislation does not allow us, as Lloyd's is a market," he said, adding the London-based insurance powerhouse has taken up the matter with the top government officials.

"We hope the Indian government recognises the Lloyd's structure and eventually allow us to enter the insurance sector," Levene said.

Lloyds, which can underwrite business worth $30 billion worldwide annually, is a society of members both insurers and individuals, who underwrite insurance and reinsurance business in over 200 countries.

The 300-year-old London-based insurance powerhouse covers the toughest risks worldwide. Most of the major insurers reinsure their risks with Lloyd's.

Over 40 per cent of the Lloyd's business is concentrated in the UK and Europe, while US occupies about one-third. Asia and other continents comprise less than 25 per cent of its business.

Lloyd's evincing interest to enter India assumes significance, as there are no private reinsurers in India. General Insurance Corporation (GIC) was converted into national reinsurer four years ago, but it also has to reinsure mega risks in international markets including Lloyd's.

Insurance regulator Irda has so far granted licence to 13 private life insurers and about 8 general insurers. Except Reliance and Sahara, all the private players have a foreign partner with upto 26 per cent stake.

No foreign player has evinced interest in entering the reinsurance sector so far, as they have not got the right Indian partners who could underwrite massive risks.

Apart from Lloyd's, major reinsurers like Munich Re, Swiss Re and General Cologne Re are keenly watching the Indian market but does not find it feasible to form a subsidiary.

Lloyds is also keen to outsource some of its services to India by relocating its back office operations. Levene, who was here with the business delegation from EU, had talks with some of the leading Indian IT companies.