AXA applies for reinsurance license in India

French insurer AXA is in the process of acquiring a reinsurance license in India, Intelligent Insurer understands.

AXA has been reinsuring public health insurance in India but because local legislation has recently  changed, AXA is now applying for a branch reinsurance license in the country.

India’s regulator has introduced regulations placing branches of foreign reinsurers at the top of a preference order setting out how Indian insurers are to cede business.

On top of the preference list are Indian reinsurers that have a minimum credit rating from any of the internationally renowned credit rating agencies for the previous three years, which only applies to state-owned GIC Re, and thereafter, the branch office of a foreign reinsurer which shall maintain a minimum retention of 50 percent of the Indian reinsurance business.

A number of foreign reinsurers have recently received approval to open a branch in India. The list includes Swiss Re, Munich Re, Lloyd’s, Hannover Re and XL Catlin.

If the license application process is successful, the AXA reinsurance operations in India will be operated by the company’s French life insurance business. The reinsurance business in India will have no links to AXA’s other operations in India. The French insurer operates in India through Bharti AXA Life, a life insurer started in 2006 as a joint venture owned to 49 percent by AXA.

In addition, Bharti AXA General Insurance offers car insurance, health and personal accident insurance.

The application process for the authorisation of a branch reinsurance license in India is divided in three stages. According to media reports, AXA has received the second level of regulatory clearance also called R2 from India’s regulator Irdai. The final approval might be received in July.

AXA has ambitions in the country and the region, but did not want to comment on the license application process.

AXA has sold its reinsurance arm AXA Re ten years ago.

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