Valueattics Reinsurance set to become India's first private reinsurer

In Debasish Panda’s last board meeting on Thursday as chairperson of the Insurance Regulatory and Development Authority of India (Irdai), the regulator approved the first reinsurance licence to a private player, Valueattics Reinsurance, backed by Prem Watsa and Kamesh Goyal. 

So long GIC Re, a public-sector entity, was the only player in the field.  “This marks a significant step in fostering competition within the reinsurance sector,” Irdai said in a statement.

 

With “R2” approval, the company is one step closer to commencing reinsurance operations. 

However, it can be in the business only after meeting the requirements of bringing in the necessary initial capital. 

 

Valueattics Reinsurance is owned by Oben Ventures LLP, promoted by Goyal, and FAL Corporation, backed by Watsa with Fairfax Financial Holdings. 

They are also the promoters of Go Digit General Insurance and Go Digit Life Insurance. 

The company will start with paidup capital of ~210 crore, it said in a statement. 

“There was a longstanding need to have private reinsurance players in India, and becoming India’s first private reinsurer marks a significant milestone for us. With this, the Digit group of companies (general insurance, life insurance, and reinsurance) will strive to become a one-stop solution for all insurance needs, allowing us to provide full-spectrum risk coverage,” said Goyal.

GIC Re has been in the field since 1972. With liberalisation in insurance in 2001, GIC Re was designated national reinsurer and has the advantage of the first right to refusal and obligatory cession. As of December 31, 2024, obligatory business accounted for 39 per cent of GIC Re’s domestic earnings and 61 per cent was non-obligatory. 

At present, there are 13 foreign reinsurance branches (FRBs) set up by global reinsurance companies, including Munich Re, Swiss Re, and Lloyd’s of London, operating in India.   

 

In 2016, ITI Re had received approval from Irdai for reinsurance, but it surrendered the licence without doing business because of operational factors.

 

In December 2018, Irdai had rejected a proposal from Go Digit to acquire ITI Re. ITI Re was set up by Sudhir Valia-backed The Investment Trust of India.

 

“It’s an interesting initiative. However, there may be challenges about capital requirements due to the extent risk has been retained and to the extent it has receded, the ratings from Irdai-approved agencies and regulations associated with investment in India. Generally, reinsurance is a capital-intensive segment that requires technical expertise and deep understanding of the business,” said Ashvin Parekh, managing partner, Ashvin Parekh Advisory Services.

 

A reinsurance expert said: “It is good for the industry. The promoters have deep pockets and expertise. They can start an Indian business with the existing capital and as they enter the international business they can go for ratings approval, which is based on capital, the strength of the balance sheet, people and systems.”

 

Irdai’s board met on March 12, when along with approval to Valueattics Reinsurance, it approved the budget for 2025-26 and reviewed investment considerations for public-sector general insurers in health insurance.

 

Additionally, the board was apprised of key initiatives such as Bima Sugam, risk-based capital and Ind AS (IFRS) implementation.

 

The status of a risk-based supervisory framework, too, was discussed. 

Fresh start

Valueattics Reinsurance will begin operations with an initial paid-up capital of Rs 210 crore

  Currently, GIC Re is the only domestic reinsurer in the country

  There are 13 foreign reinsurance branches set up by global reinsurance companies

  Global reinsurance firms include Munich Re, Swiss Re, and Lloyd’s of London