Licensed foreign reinsurers are increasing their footprint in India’s reinsurance sector, with their share of gross written premiums (GWP) nearly doubling from 25.8% in 2019 to 49% in 2023, according to data from GlobalData. The company projects that this share will exceed 50% by 2025.
Figures from GlobalData show that the market remains concentrated, with the top five reinsurers – four of which are foreign – accounting for 95.4% of GWP in the financial year ending March 2024. The top four foreign reinsurers grew their combined market share from 19.4% in 2019 to 44.4% in 2023.
This expansion is supported by regulatory measures, competitive pricing, flexible underwriting terms, economic growth, and increasing insurance penetration. Each of the top four foreign reinsurers posted double-digit compound annual growth rates in GWP between 2019 and 2023.
The General Insurance Corporation of India (GIC Re), while still the largest player, has seen its market share decrease from 74.2% in 2019 to 51% in 2023. Foreign reinsurers including Munich Re and Swiss Re have continued to expand their positions and are seen as emerging competition for GIC Re.
GIC Re’s market share has also been impacted by the reduction in obligatory cession rates, losses from agricultural reinsurance, and a decrease in non-obligatory business. The IRDAI (Re-insurance) Regulations, 2018 facilitated the entry of foreign reinsurers by permitting the establishment of branch offices to underwrite domestic reinsurance.
GlobalData said that the competitive landscape would evolve further with the entry of new players such as Valueattics Reinsurance.
Valueattics Reinsurance received its license from the Insurance Regulatory and Development Authority of India (IRDAI) in March, making it the first private-sector reinsurer to enter India’s market. The licensing of Valueattics Re ends GIC Re’s five-decade status as the sole reinsurer based in India.
In 2023, obligatory cessions represented 39% of GIC Re’s earnings, with non-obligatory business contributing the remaining 61%. Although GIC Re currently benefits from obligatory cession rights and first refusal, this advantage may not persist.
Insurers are reportedly pushing back against obligatory cession requirements, citing unfavorable commission terms and sufficient financial strength and underwriting capacity to manage their own risks.
Additionally, the Indian government is preparing to divest up to 10% of its stake in GIC Re. The move is aimed at complying with the Securities and Exchange Board of India’s mandate for listed companies to maintain a minimum public shareholding of 25%. This divestiture is expected to influence GIC Re’s position in the market in 2025.
General insurers in India predominantly cede reinsurance in property, motor, and personal accident and health (PA&H) lines, which made up 84.6% of reinsurance ceded premiums in 2023.
Foreign reinsurers, meanwhile, largely grew their market presence between 2020 and 2023 by focusing on property and motor insurance, which together accounted for 70.8% of their collective business in 2023. These reinsurers accounted for 50% of India’s motor reinsurance cessions and 26% of property reinsurance cessions in the same year.
Loss ratios in these segments have played a role in reinsurance demand. In 2023, the loss ratio for property insurance reached 83.6%, while agriculture insurance registered a loss ratio of 95.6%. PA&H recorded a loss ratio of 87.5%, and motor insurance stood at 80.6%.
GlobalData projects the Indian reinsurance market to grow at a compound annual growth rate of 7.3%, reaching ₹832.8 billion (US$9.7 billion) by 2029. This growth, combined with broader economic expansion, is expected to further attract foreign reinsurers. The Insurance Regulatory and Development Authority of India (IRDAI) continues to take steps to support the development of the domestic reinsurance sector.
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