Kolkata, Dec 16 (IANS) The Insurance Regulatory and Development Authority of India (IRDAI) is hopeful that global reinsurance companies, which will get final clearance from the regulator to open their branch in India, will be operational in the next six to nine months, an IRDAI official said on Friday.
“We have received seven applications from foreign reinsurance companies, which have shown interest to open their branch offices in India. Applications from seven companies are in the different stages of consideration of the insurance regulator. We are hopeful they should be operational within the next six to nine months,” said IRDA Member (Finance and Investment) V.R. Iyer.
She said a foreign reinsurer should get three levels of licences from the insurance regulator to start operations.
Presently, public sector General Insurance Corporation of India (GIC Re) is the only reinsurer operational in the country and foreign reinsurers have liaison office in India.
In order to mitigate risks, insurance companies can go for reinsurance, Iyer said.
With the clearance of opening branches of foreign reinsurance companies, domestic insurers will be able to undertake more risk. They can do more business and manage their capital more efficiently, she added.
“In India, we encounter with more risks such catastrophic and disaster risks. As of now, there are no insurances available for covering that. With reinsurance companies coming to the country, insurance companies can create more products,” Iyer said.
She said low insurance penetration in the country provides a huge opportunity for insurance players.
Citing a study, she said, “By 2025, the life insurance business is expected to touch $185 billion and non-life to touch around $ 75 billion.”
In relation to listings of insurance companies in the stock exchange, Iyer said the regulator issued an exposure draft and leaves it to the industry to decide when they want to list. “We are not giving any time frame to them,” she added.