Jio-Allianz, Fairfax-backed Valueattics Re set to shake up India's Rs 50,000-cr reinsurance market
Jio-Allianz
and Valueattics Re-a JV between Fairfax's Prem Watsa and
Kamesh Goyal
's Oben Ventures-enter the market, challenging the dominance of state-run
GIC Re
in the country's ₹50,000-crore reinsurance business.
GIC Re currently has a 51% market share, while the rest is distributed among 11 foreign reinsurance branches. On Friday,
Jio Financial Services
(JFSL) and
Allianz Group
(Allianz), through its wholly owned subsidiary Allianz Europe BV, announced they have entered into a binding agreement to form a 50:50 domestic reinsurance joint venture in the insurance market in India.
Explore courses from Top Institutes in
Select a Course Category
Operations Management
Technology
Product Management
Degree
CXO
healthcare
Digital Marketing
MBA
Design Thinking
Data Analytics
Project Management
Leadership
Healthcare
PGDM
Data Science
Public Policy
others
Data Science
Artificial Intelligence
Others
Finance
Cybersecurity
Management
Skills you'll gain:
Quality Management & Lean Six Sigma
Analytical Tools
Supply Chain Management & Strategies
Service Operations Management
Duration:
10 Months
IIM Lucknow
IIML Executive Programme in Strategic Operations Management & Supply Chain Analytics
Starts on
Jan 27, 2024
Get Details
The two companies also entered into a non-binding agreement for setting up equally owned joint ventures for both general and life insurance businesses in India.
ET Bureau
Regulatory norms such as mandatory cession and order of preference could benefit the new entrants, giving them an edge over other reinsurers. Regulations mandate Indian insurers to cede 4% of each policy to GIC Re.
This would be Allianz's third reinsurance entity after its existing branches under the Foreign Reinsurer Branch (FRB) and International Financial Services Centre Insurance Office (IIO) regimes. This proposed company would be an India-incorporated entity with a paid-up capital of a minimum ₹200 crore.
While the other two reinsurance entities are focused on speciality reinsurance and certain lines of risks, the third entity, which will be an Indian reinsurer would have a standalone balance sheet and the flexibility to do treaty and facultative reinsurance.
GIC Re, the national reinsurer, has long been the anchor of the domestic reinsurance market. In 2023-24, a total reinsurance premium of ₹62,113 crore was collected by Indian reinsurer GIC Re and foreign reinsurance branches (FRBs). About 81% of this business came from within India, which is ₹50,553 crore. Of this Indian business, GIC Re handled around 51%, while the remaining 49% was done by the foreign reinsurance branches including global reinsurers like Lloyd's.
Reinsurers operating from within India, like Jio-Allianz and
Valueattics Re
could get preferential access over cross-border reinsurers in the order of preference mandated by IRDAI. As per IRDAI guidelines, every Indian general insurer must cede 4% of their sum insured on each policy to GIC Re- the Indian reinsurer under compulsory cession rules.
While GIC enjoys 4% mandatory cession, this is subject to annual review. Also, reinsurers operating from within India, like Jio-Allianz and Valueattics Re, could enjoy preferential access over cross-border reinsurers in the order of preference mandated by IRDAI.
The entry of Jio-Allianz could bring the scale, digital reach, and capital heft of Reliance Industries, while Valueattics Re, headed by Canadian-Indian billionaire Prem Watsa, entered the
Indian reinsurance market
in March this year and is expected to tap into Fairfax's global expertise and balance sheet strength, further accelerating competition in the domestic landscape.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
4 minutes ago
- Business Standard
Statsguru: Rising engine-failure incidents cast a shadow on Indian skies
The common issues identified include failures in the High-Pressure Turbine and Gear Turbo Engine systems Jayant Pankaj Listen to This Article On July 16, an IndiGo flight was forced to make an emergency landing at the Mumbai airport following a reported engine failure. Two more similar incidents involving IndiGo took place within the same week. In the wake of the Boeing AI 171 crash, concerns over aircraft safety have intensified. However, these are not isolated cases. Flight cancellations in India, particularly those caused by technical glitches, have risen in the past four years to peak in 2023, with engine failures being a major contributing factor. IndiGo, which operates the largest fleet among Indian carriers — including SpiceJet, Air India, and others
The Print
33 minutes ago
- The Print
Sotefin Bharat plans Rs 80 crore IPO to build parking robot unit for automated parking in Bengal
'We are in the process of launching an IPO, which will help us become Atmanirbhar in the production of robots used in automated parking systems. The robot manufacturing facility will require around Rs 40 crore, while the remaining Rs 40 crore will be largely used for debt reduction and enhancing working capital to undertake larger projects,' Sotefin Bharat Managing Director & CEO Arup Choudhuri told PTI. The entire issue will be a fresh equity offer, with no stake dilution by the promoters or existing PE funds, a top company official said. Kolkata, Jul 27 (PTI) Swiss automated parking solutions major Sotefin SA's Indian subsidiary, Sotefin Bharat, on Sunday said it will hit the capital market to raise Rs 80 crore to support indigenous manufacturing of robots for automated parking systems in West Bengal. The company has announced a new manufacturing facility at Bagnan in West Bengal's Howrah district, entailing an investment of approximately Rs 40 crore. Once fully operational with in-house robotic manufacturing capabilities, the state-of-the-art plant is expected to create over 100 jobs and significantly boost Sotefin Bharat's production capacity, Choudhuri said. The facility is projected to support the creation of over 10,000 automated car parks or 25 automated parking projects per year, he added. The equity structure of the company is evenly held by two Indian promoters—Arup Choudhuri and Jignesh Sanghvi—Swiss partner Sotefin SA, and a clutch of PE funds, each holding 25 per cent. Post IPO, the fresh issue will dilute all existing promoter holdings by 6.25 per cent, taking public shareholding to nearly 25-26 per cent, Choudhuri said. The listing will also help unlock value, and the company is currently working with merchant bankers to prepare the Draft Red Herring Prospectus (DRHP), which is expected to be filed with the regulator within a month. The company has also started exporting its systems to the US and Dubai, officials said. 'Our order book currently stands at Rs 1,000 crore, which should support a 50–60 per cent growth over the next 3–4 years,' said Executive Director Jignesh Sanghvi. PTI BSM RG This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
&w=3840&q=100)
Business Standard
34 minutes ago
- Business Standard
UK cos can offer telecom services in India without local office under CETA
Companies from the UK will be able to offer services in sectors such as telecom, and construction in India without setting up a local presence, under the free trade agreement signed between the two countries. The British firms will be treated on par with Indian firms. The Comprehensive Economic and Trade Agreement (CETA) was signed on July 24 in London. It may take about a year for items implementation as the free trade pact needs approval from the British Parliament. "UK companies can now provide telecom, construction, and related services in India without establishing a local presence, enjoying full national treatment, meaning they will be treated on par with Indian firms," the commerce ministry said. Services is a key chapter in the agreement as both countries are strong in different kinds of services. India enjoys a trade surplus of around $6.6 billion with the UK. The country's services exports stood at $19.8 billion and imports at $13.2 billion. In the agreement, the UK has provided a comprehensive and deep market access in 137 sub-sectors to Indian firms. On the Indian side, commitments have been extended in 108 sub-sectors, granting UK firms access to domains like accounting, auditing, financial services (with FDI capped at 74 per cent), telecom (100 per cent FDI allowed), environmental services, and auxiliary air transport services, it said.
