5 April 2017Insurance

Lloyd’s inaugurates India branch with MS Amlin and the UK Chancellor

London-based specialty re/insurance market Lloyd’s has inaugurated its Indian branch in the presence of UK Chancellor Philip Hammond and joined by MS Amlin as the first participating syndicate.

Lloyd’s India will act as a domestic reinsurance branch of Lloyd’s, providing capacity and expertise to support India’s growing economy with a particular focus on infrastructure, agriculture and disaster management. Shankar Garigiparthy will lead Lloyd's India operations as country manager and CEO.

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

The move to open a local branch in India follows a decision by the country’s regulator to introduce rules placing branches of foreign reinsurers at the top of a preference order setting out how Indian insurers are to cede business.

State-owned GIC Re has the right of first refusal, but thereafter, the risk has to be passed on to the branch office of a foreign reinsurer which shall maintain a minimum retention of 50 percent of the Indian reinsurance business.

“Lloyd’s decision to expand into India is a perfect example of the role Britain’s world-leading financial services sector plays in supporting growth both at home and abroad,” said Hammond.

“It will help Indian insurance firms increase the resilience of the Indian economy to catastrophic events and boost Britain’s ties with one of the world’s most exciting economies, underlining our status as a truly global, trading nation.”

Reinsurers are excited about India because of the insurance growth potential they see for the country. Drivers for growth are the bright economic outlook on the one side and a low insurance penetration on the other.

The growth of India’s insurance market has not kept pace with the country’s rapid economic development, leaving many sections of the economy vulnerable in the face of significant natural catastrophe exposures, Lloyd’s noted in a statement. The introduction of foreign reinsurers will help to close this underinsurance gap and develop India as a centre for insurance, reinsurance and associated services, it added.

John Nelson, chairman of Lloyd’s, said: “This is a true milestone in Lloyd’s 328-year history. We have long hoped to be able to increase our support for the Indian market and now we are on the doorstep of our clients and trading partners in Mumbai and we look forward to working with them to develop the types of innovative risk solutions that Lloyd’s is world famous for.

“Lloyd’s will help to strengthen and diversify the Indian reinsurance market, increasing the capacity, products and choice available to Indian insurers. This will, in turn, help to create a more vibrant insurance market and increase the level of protection across the Indian economy.”

MS Amlin is the first Lloyd’s insurer to join the reinsurance branch and their specialist underwriting team will offer a range of reinsurance products to Indian cedants. Further Lloyd’s insurers are expected to join in time.

Hugo Bashall, CEO of MS Amlin India, said: “We have a long-standing relationship with the Indian insurance market, having played a lead role in providing reinsurance to local cedants for many years. We look forward to making a positive contribution to the development of reinsurance onshore and providing a high-quality local service experience.”

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