Lloyd’s of London has received its preliminary licence R1 from the Insurance Regulatory and Development Authority on Friday. It plans to start operations in 2017.
John Nelson chairman Lloyd’s who is in India as part of the United Kingdom Prime Ministerial trade delegation, said it will be a slow start in India as GIC, the sole Indian reinsurer is given prference over others. The government had opened up market for reinsurance companies and Lloyd’s in March 2015 as part of the amendment to the Insurance Act 1948. ANIRBAN BORA “In India it will be slow to start with as Irda has given first right of refusal to Indian reinsurer,“ said John Nelson chairman Lloyd’s of London. “We have dis cussed it with the government and the regulator and I get a feeling that directionally they will liberalise it.“
The marketplace expects syndicates to slowly join their platform as the regulator has given first right of refusal to Indian reinsurer General Insurance Corporation. Lloyd’s will look to provide both protection and new opportunities for many domestic insurance businesses.
GIC gets 55% of premium income from domestic market, enjoys compulsory reinsurance deals with local insurance companies. Rules mandate companies to cede minimum 5% risks with GIC. However, GIC has been focusing on growing their over seas business, by raising its share to 50%.
“A level playing field for all reinsurers will mean that domestic market can thrive and become a hub for innovative new products that meet the need of businesses,“ Nelson said.
As part of its on-shore plans, Lloyd’s appointed Shankar Garigiparthy as its new country manager for India in April 2016. Shankar joined Arun Agarwal, General Representative for Lloyd’s in India since 2011 and they have been working towards setting up Lloyd’s presence in India.
India is one of the highly underinsured country and the volume of risk is growing. Indian penetration is at 0.6% to the GDP.
Source: Economic Times
Date: 8th November 2016