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Hannover Re — the world’s third largest reinsurance company — has decided to set up a branch in India, its visiting Chairman Ulrich Wallin has said.
“We will be applying (to the insurance regulator) for branch approval. It would be considered a success if we are able to set up a branch here before March 2016,” Wallin said in an interview here.
Wallin — who sees a lot of potential for Hannover Re’s growth in India — had separate one-to-one meetings with Finance Minister Arun Jaitley and Health Minister J P Nadda here on Tuesday.
Hannover Re is among the several top global reinsurance giants who are making a beeline for the Indian market to tap the growing re-insurance opportunities here.
This has been made possible by the Modi-led government, which has pushed through several changes in the insurance law so as to enable global reinsurers to set up underwriting business in India.
As on date, Hannover Re only has a ‘service office’ in Delhi and Mumbai and annually writes about $130 million (cross-border) from the Indian market.
Currently, the overall market size for reinsurance in India is about $2 billion. Hannover Re’s global premium income is about $18 billion.
Wallin said there is a lot of potential to grow the reinsurance business in India, but “barriers to entry to the entire market should be reduced”.
“Investing in reinsurance is not that attractive here although we are keen to set up a branch here. Allowing foreign reinsurers to set up a branch here is good first step. The regulations that would now get issued should be clear and unambiguous”, he said.
The Indian regulatory framework should allow all forms of reinsurance so long as the premium is within India, said Ankur Nijhawan, Managing Director, Hannover Re Risk Management Services India.
Hannover Re is keen to offer its knowhow and technical expertise in enlarging the coverage of insurance in the country, particularly in the space of healthcare and agriculture.
COMPETITION
Asked about Lloyd’s and other reinsurance majors’ plan to set up branch in India, Wallin said “healthy competition was not a bad thing”.
“We don’t mind working in a competitive market. Having Lloyd’s here (in India) should not be a negative for us,” Wallin said.
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