The IFSCA, a unified regulator for developing India’s first International Financial Services Centre(IFSC) has already issued licenses to half a dozen of global players including Berkley Insurance Asia, Allianz Partners, Peak Re, Singapore Re and Doha Insurance Group, to set up operations in the GIFT-IFSC
Gandhinagar/GIFT City: After setting up both life insurance and non-life insurance joint ventures with state owned Central bank, European major Generali has established its reinsurance business in the Gujarat International Finance Tec-City, International Financial Services Centre (GIFT IFSC).
The insurer has received a license from the International Financial Services Centre Authority (IFSCA) to set up its reinsurance operations in GIFT-IFSC, India’s sole international financial center, last week
The 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 half a dozen of global players including Berkley Insurance Asia, Allianz Partners, Peak Re, Singapore Re, Doha Insurance Group and Indian government owned GIC Re to set up their reinsurance operations in the centre.
Two more global reinsurers Everest Re and Starr International Singapore, an entity of US based Starr International have also applied for licenses from IFSCA to operate in GIFT-IFSC.
AXA ,which was first to get a licenses to operate in GIFT-IFSC, has surrendered the license without doing any business.
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 IFSC Insurance Office (IIOs), which are based within the IFSC, a special economy zone for financial services, and direct Indian insurers, spread all over the country.
Inside GIFT-IFSC, trade credit and aircraft leasing businesses are developing well and can provide good opportunities to re/insurers and reinsurance brokers located in the region,” said K Mahipal Reddy, executive director, IFSCA.
Currently, four categories of reinsurers- Indian reinsurers including GIC Re and newly set up Digit Reinsurance, foreign reinsurance branches(FRBs) where almost a dozen of reinsurance multinationals have set up their branches in India, re/insurers in GIFT- IFSC termed as IFSCA Insurance Offices(IIOS) and over 290 cross boarder reinsurers(CBRs) registered with the Indian insurance regulator IRDAI, are active players in the Indian reinsurance market.
Indian reinsurers and FRBs are licensed by the IRDAI while IFSC Insurance offices including insurers and reinsurers are licensed by the IFSCA.
Adding further competition in the India’s Rs 1 trillion reinsurance market, many more global reinsurers are now keen to set up their reinsurance operations in the GIFT-IFSC. These new reinsurance companies at the GIFT-IFSC will be competing with state-owned GIC Re and other foreign reinsurance branches(FRBs) for reinsurance business in India as well as neighboring markets.
IFSCA Insurance Offices have mobilised a total premium of $204.56 million while intermediaries located in GIFT-IFSC have transacted a total premium of $ 411.36 million in FY 24-25.
Recently, Jio Financial Services has tied up with Allianz for floating three 50-50 JVs for life ,non-life and reinsurance business in Indian market.
As Allianz is already present in the GIFT-IFSC, it will have two reinsurance companies in India after its reinsurance JV with Jio Financial Services get a license. Allianz’s existing FRB in India-Allianz Global Corporate & Specialty (AGCS)- will merge with its new reinsurance JV.
Similarly, after Singapore Re’s entry into GFT-IFSC, Prem Watsa owned Fairfax will have two reinsurance companies in India as both Singapore Re and Digit Reinsurance have majority stakes of Fairfax.
On the basis of government’s objective, the IFSCA is aiming to develop GIFT IFSC a global Re/insurance Hub with its principle based approach for product designing, pricing and filling.
After the IRDAI came out with regulations that all CBRs have to provide for collateral for doing business with Indian market, with effect from Apr 2025, a lot of CBRs are now showing interest to set up operations in GIFT-IFSC from where they can do business with Indian market with lot of advantages and don’t have pay any collateral.
The GIFT-IFSC based reinsurers can also provide reinsurance and retro support(reinsurers buying insurance covers) to insurers and reinsurers based outside India.
Recently, IFSCA has constituted a Standing Committee on Insurance under the chairmanship of M. R. Kumar former chairperson, Life Insurance Corporation. The purpose of the committee is to assist the regulator to fulfill its responsibilities with respect to the development and regulation of insurance and reinsurance.
Some of the members of this committee are- N Ramaswamy, CMD, GIC Re, Hitesh Kotak, Chief Executive – Japan, India, Korea and South-East Asia, Munich Re, Shasi Nair, Chief Executive, Berkley Insurance Asia, Vinay Surana MD, Asia Pacific, Middle East and Africa-Allianz Partners, Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance, Alpesh Shah, MD and senior partner, Bostan Consultancy Group, Amit Roy, partner, leader-Insurance and Allied Business, PwC and insurance legal expert Satyendra Shrivastava, senior partner, Consortia Legal.
The Terms of Reference (ToR) of the committee are: Benchmarking IFSCA regulations with competing IFSCs and advising on issues and enhancements to regulation of Insurance and (Re)insurance GIFT-IFSC as well as the relevant laws of India, benchmarking the ease of doing business and cost of doing business and reviewing the demand for insurance products.