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ITI Reinsurance (ITI Re), the first private sector reinsurance company in India and promoted by Indian entrepreneurs, is all set to commence operations.
“ITI Re will go to market by the end of this month,” R Raghavan, Chief Operating Officer-Designate, ITI Re, told BusinessLine .
ITI Re is promoted by Fortune Financial Services (India), which in turn is promoted by Sudhir Valia.
On the expected business opportunity, Raghavan said the Indian general insurance market is on a healthy growth phase achieving double-digit growth on a year-on-year basis. “This will obviously warrant additional demand for reinsurance capacity as well as expertise in product innovation and development.”
Growth is already ‘phenomenal’ and will be further driven by agricultural insurance, thanks to the Pradhan Mantri Fasal Bhima Yojana. “This will also trigger a huge demand for reinsurance for that sector. Here too, ITI Re can play a very constructive role,” he said.
On the nature of competition in the market, Raghavan said the Indian insurance market always had a steady supply of reinsurance capacity from across the borders in addition to GIC Re.
“Hence, for an Indian-owned new entrant like ITI Re, the field out there has been the one which was always there. Accordingly, we have factored in such competition in our business strategy,” the COO said.
The market dynamics does not change with regard to capacity available except for the incremental capacity brought by ITI Re, proximity of servicing offices of foreign reinsurers and compulsory retention of business assumed, within India, at a particular level, by branches of foreign reinsurers.
The reinsurers incorporated and licenced in India are given priority over cross-border reinsurers.
“This, implemented in the true letter and spirit of the regulations concerned, will ensure that the locally set up reinsurers are assured of the First Right of Refusal before cross-border reinsurers can supply capacity,” he said.
This will encourage more Indian and overseas players to set up shop here. “This optimisation effort will eventually lead to India emerging as a global reinsurance hub,” he added.
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