Reinsurance Pie in Life Policies to Get Bigger

The reinsurance section in the life insurance segment is set to see more action in the near future, with more entities showing interest.Reinsurance refers to an insurance company itself taking insurance, either directly or through other entities, for the risk in its own covers, to check own payouts. Till now, other than government-owned General Insurance Corporation of India (GIC Re), no other entity has branches in this country, although foreign-based reinsurers are allowed to do business here, too.  Currently, the reinsurance market is Rs 18,000 crore in India, of which life insurance only contributes Rs 1,200-1,300 crore. Reinsurance players are seeing a big opportunity in this space.

GIC Re itself aims to focus more on the life insurance space for its reinsurance business from this financial year, says chairman and managing director Alice G Vaidyan. And, foreign reinsurers are hoping to do a lot more in this segment. Reinsurance Group of America (RGA) has got the R1 or initial approval to set up a branch in India. It wants to expand its business in this country's life insurance space. Globally, they are the market leaders in the life and health insurance space.Thomas Mathew, managing director for India, Sri Lanka and Bangladesh? at RGA Services India, said they were a strong player in this space in the world and would be looking at the opportunity in this country as well. Mathew said in India they had about 35 per cent of market share -- of the total market of reinsurance premium ceded per year in life insurance of  Rs 1,200 crore last year, they did Rs 439 crore. They have 23 clients in India, including Life Insurance Corporation of India (LIC).  

There was a proposal to have life insurance companies transfer up to 30 per cent of their risks to GIC Re but this was put on hold. While the Insurance Regulatory and Development Authority of India (Irdai) had brought out regulations in this regard in 2013, it has not been implemented.