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IRDA expects 5-6 new players to enter reinsurance market

Monday, September 19, 2016
By Dominic Rebello

Up to six new players in the reinsurance market are likely to enter India by January 2017, the Insurance Regulatory and Development Authority of India (IRDA) chief T.S. Vijayan, said at an ASSOCHAM Global Insurance Summit last week.

“About five-six (companies) have come and I think by January 2017, there should be some players in this market, we will be taking a decision in October in the next authority meeting, then they have to bring capital and start working at it,” said Vijayan.

The state-owned GIC Re is the only reinsurer operational in the country now. The global reinsurers that have approached Irdai for licence include Munich Re, Swiss Re, Scor, Hannover Re, XL Catlin and RGA. A foreign reinsurer should get three levels of licences from Irdai to start operations and some of them have already got R1 licence and now are awaiting R2 and R3.

Vijayan also said that IRDA would finalise the regulations pertaining to payment of commission or remuneration to insurance agents and intermediaries in October. “I believe in next board/authority meeting, which will be in October, we will be able to finalise.” He said that though insurance industry in India has grown in terms of premium collections from Rs 45,000 crore in 2000 to Rs 4,63,000 crore in 2015-16, insurance penetration against world average and other Asian countries highlight much more ground to be covered.

“We need to focus on number of lives or risks covered, spread across geographies, gender and level of insurance coverage, as clearly indicated by around 0.7% only insurance penetration observed for Indian general insurance industry against world average of 2.77%,” said Vijayan.

He said there are healthy growth prospects for insurance business in general and particularly in property, health and pension lines of business.

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