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Who Offers Reinsurance?

- In India, general insurance companies previously had a monopoly on reinsurance for over four decades, but the IRDA has now opened the market to private overseas reinsurers. - The IRDA has approved initial licenses for four global reinsurance companies: Munich Re, Hannover Re from Germany, Swiss Re from Switzerland, and French company SCOR. - Munich Re is the largest reinsurance company globally, followed by Swiss Re and Hannover Re. The US-based RGA and UK-based XL Catlin have also applied to operate in the Indian market.

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46 views1 page

Who Offers Reinsurance?

- In India, general insurance companies previously had a monopoly on reinsurance for over four decades, but the IRDA has now opened the market to private overseas reinsurers. - The IRDA has approved initial licenses for four global reinsurance companies: Munich Re, Hannover Re from Germany, Swiss Re from Switzerland, and French company SCOR. - Munich Re is the largest reinsurance company globally, followed by Swiss Re and Hannover Re. The US-based RGA and UK-based XL Catlin have also applied to operate in the Indian market.

Uploaded by

ashok karki
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© © All Rights Reserved
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Who Offers Reinsurance?

It is important to note that not all insurance companies that are in the business play
reinsurer to other insurance companies. The capital requirement to settle the ceding
company’s claim is much higher.
In India, general insurance Company was the sole reinsurer for over four decades. But
The Insurance Regulatory and Development Authority of India (IRDA) has approved the
first phase of license to ITI Reinsurance and thus has opened the Indian insurance
market to the private overseas sector.
IRDA has granted the initial approval – known as R1 regulatory parlance – to four global
players in the reinsurance industry. Munich Re and Hannover from Germany, Swiss Re
from Switzerland and French reinsurance giant SCOR. There is an ongoing process of
confirming the final licence i.e. R2 to these global reinsurers and may take some time.
Munich Re is the largest reinsurance company in the world followed by Swiss Re and
Hannover. The US-based Reinsurance Group of America (RGA) and UK-based XL
Catlin have also applied for operating in the Indian market.

Reinsurance Who Buys Reinsurance?


We already know that primary insurance companies need reinsurance. But there are
companies who specifically buy insurance to keep the business running. The reinsurers
deal with the ceding companies, reinsurance intermediaries, multinational corporations
and banks. The business model of the primary insurance company decides how much
of the business needs to be insured. The company also considers its capital muscle,
risk appetite, and assess the current market conditions before buying the reinsurance.
Insurers whose portfolios are vastly exposed to natural or catastrophic disasters like
flood, earthquakes, etc. need insurance cover the most. While small players that might
need a bigger reinsurance cover because of the diversity of insurance risk coverage
and large client base. Companies with a focused line of working or with a specific
clientele need more reinsurance cover than those with a diverse range of clientele. In
the case of commercial portfolios, even though the risk number is small (aviation
industry or utility industry) the exposure is very large and thus such companies need
more reinsurance cover. In many cases, companies seek the insurance cover in order
to benefit from the reinsuring company’s expertise and financing while the ceding
company expands its product range or move into a new geographical area.

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