Lloyd's to start India operations by 2017
Lloyd’s of London will start its India operations in Mumbai by early 2017.
It has applied for a license to the Indian insurance regulator IRDAI to operate in India and currently underwrites Indian business on an off-shore basis.
Lloyd’s currently underwrites around $200 million of business in different segments such as marine, liability, property, aviation and energy.
According to corporation, other international reinsurance majors like Swiss Re, Munich Re, Hannover Re and SCOR, XL Catlin are also waiting for the final approval to start their operations in the country.
James Nelson, chairman at Lloyd’s, said: “We will start our India operation with just couple of syndicates and would scale up gradually. We would target 8-10 percent growth in Indian markets.”
“With high economic growth, India is a high priority country for us. We will start our Indian operations with two syndicates and would grow our business in the country gradually by offering solutions for complex and specialist risks like infrastructure, energy, director and officer liability, trade credit, terrorism, and disaster management. For us Indian market from the day one will be a high competitive market as other global reinsurers are also starting their operations in the country.”
India has significant vulnerability to natural catastrophes and yet there is significant underinsurance in the region, according to Lloyd’s. In 2013, the non-life penetration rate for India was 0.6 percent, compared with an average of 1.4 percent in Asia-Pacific and a 6.1 percent global average.
“Insurance penetration is directly linked to country’s GDP growth,” added Nelson. “One per cent higher insurance penetration will spur larger economic growth in the country.”
Nelson also said that the IRDAI has adopted a cautious approach in framing regulations for the overseas reinsurers and it is expected that they will be reviewed every year/ For Indian market, GIC Re, country’s official reinsurer has the first right to refusal in doing any reinsurance business in the country.
“Globally, we operate in a multichannel basis and India we will do business through brokers,’’ Nelson concluded.
