The Insurance Committee of The Indian Merchants’ Chamber (IMC), organized a Symposium on “An International Reinsurance Hub – Why India Needs It” on Thursday, January 17, 2013. Chairman of Parliamentary Standing Committee on Finance and former Union Finance Minister of India, Hon’ble Mr. Yashwant Sinha was present at this Symposium as Chief Guest.
The Symposium, was attended by leaders from the financial sector in India in general and insurance sector in particular, and world leaders in Reinsurance.
Mr Yashwant Sinha, in his address at the Symposium said on making the country a reinsurance hub, it was necessary to have an enabling legal framework to be put in place first.
"Despite the insurance sector being open to foreign investment, we don't have a single reinsurance company setting shop in the country. I think that the present amendments will not work and we need a new bill for this," he said.
Talking about the reinsurance sector, GIC Re CMD Ashok Roy said the country should have a favourable taxation regime for the general insurance space.
He also proposed that the government create special economic zones for developing the country as a reinsurance hub.
Chairman and Managing Director of New India Assurance Company Limited Mr. G Srinivasan said that foreign reinsurance companies should be governed by the same rules as the domestic re-insurers for a level playing field in this space.
Lloyd's Asia Managing Director Kent Chaplin said the company is hopeful that present insurance amendment bill will be passed in the Parliament and added that Lloyd’s is keen to open branches in the country.
At the time of opening up of the Indian insurance sector in the late nineties the prime objective was to capitalise on the then existing atmosphere of liberalisation across the globe for the benefit of the growing Indian Economy and transform it from a Developing one to a Developed one.
A part of this initiative was to establish and develop India as a reinsurance hub as it had the capability, capacity and potential to become one. The first 12 years of the Indian insurance sector after liberalisation have witnessed rapid growth in all classes of business. Projections for growth of the Indian insurance sector in the current decade and thereafter too are very encouraging and optimistic.
It is therefore safe to assume that by 2020 the Indian sub-continent would be the Reinsurance Hub of this part of the globe. It has the potential to leave behind the other two Reinsurance Hubs in this region, Dubai and Singapore.
As far as the Insurance infrastructure in the country is concerned everything required is in place: an active Regulator, growing insurance companies, new products being launched with regularity, vast talent pool of Insurance and reinsurance professionals, performing intermediaries and ancillary service professionals like loss adjusters, lawyers, Risk management professionals and above all low insurance penetration that throws up enormous possibilities.
CMD Address RI Hub Feb2013 (282 KB)