Opening up the Indian reinsurance market to new players, the Insurance Regulatory and Development Authority of India (IRDA) has given its initial approval, known as R1 in regulatory parlance, to four global players — Munich Re, Hannover from Germany, Swiss Re from Switzerland and French major SCOR.
Confirming the development, a senior IRDA official said that after providing the R1 clearance, the regulator now is conducting the due diligence for granting the final approvals (R2) to these global reinsurers to set up direct operations in the country and the process may take some time. Munich Re is the largest reinsurance player in the world while Swiss Re is the second largest and Hannover comes third in global size.
After the IRDA had announced its reinsurance regulations in November 2015, six global reinsurers, which have been doing their business offshore, have already applied for the license to set up branch operations in India. Two more international players, US based Reinsurance Group of America (RGA), an exclusive life reinsurance player and UK-based XL Catlin are waiting for the R1 clearances from the IRDA. While normal insurers need three stages of clearances, reinsurers have to get only two levels of approvals. Lloyd’s of London is also waiting in the wings for approval but the IRDA is yet to finalise the guidelines for Lloyd’s which functions as an insurance market.
