Peak Re, the fourth reinsurer to get a license, has a total global business of $1.75 billion. It has already developed a major Indian portfolio, largely constituting Crop and Property, as a Cross Boarder Reinsurer(CBR) and gearing up to expand it further in the forthcoming Apr 1 renewals as a direct reinsurance player in the Indian market
Mumbai: Adding further competition to the India’s Rs 1 trillion reinsurance market, Hong Kong based global reinsurer Peak Re has received a license, on Feb 20, to open its office in the Gujarat International Finance Tec-City, International Financial Services Centre (GIFT IFSC).
The International Financial Services Centre Authority (IFSCA), a unified regulator for developing India’s first International Financial Services Centre(IFSC) is the licensing authority of the GIFT-IFSC and it has already issued licenses to four global reinsurers, Berkley Insurance Asia, Allianz Partners and Axa, to set up operations in the centre.
Sudhir Salian, Director, Head of India at Peak Re is currently the principal officer of reinsurer’s GIFT IFSC branch.
This is also for the first time any Asian major reinsurance player has been licensed to do business in GIFT-IFSC).
Peak Re, with a total global business of $1.75 billion, has already developed a major Indian portfolio, largely constituting Crop and Property, as a Cross Boarder Reinsurer(CBR) and gearing up to expand it further in the forthcoming Apr 1 renewals as a direct reinsurance player in the Indian market. .
Going by the existing regulations, along with other players in the GIFT-IFSC, Peak Re, one of the top 30 global reinsurers, will be directly competing with GIC Re and 12 foreign reinsurance branches(FRBs), setup by global reinsurance majors, to provide reinsurance covers in $133 billion Indian insurance market.
One of the rules, First Right to Refusal, provides that any Indian primary insurers (Cedents) has to first knock at GIC Re’s door and then can proceed to the FRBs and the players in the GIFT IFSC for seeking reinsurance covers.
The IFSCA, which is aiming to develop GIFT IFSC a global Re/insurance Hub with its principle based approach for product designing, pricing and filling, has currently licensed 16 IFSC Insurance Offices (IIOs) and 25 IFSC Insurance Intermediary Offices (IIIOs), taking the total count of registered insurance entities to 41. All the 16 IIOs are also well-diversified between life, non-life, health and re-insurers.
The reinsurers located in the GIFT-IFSC enjoy a host of advantages ranging from tax to capital and can provide reinsurance support to both to IIOs, which are based within the IFSC, a special economy zone for financial services, and direct Indian insurers, spread all over the country.
They can also provide reinsurance and retro support(reinsurers buying insurance covers) to insurers and reinsurers based outside India.
In FY 24, 16 IIOs have recorded a premium of $149 million while 25 IFSC Insurance Intermediary Offices (IIIOs) have transacted a total premium of $276 million during the period.