India’s largest reinsurer, General Insurance Corporation of India (GIC Re), is facing a continued decline in market share, potentially paving the way for foreign reinsurers to control more than half of the market by year-end, according to GlobalData.
Data from the analytics company shows that, while GIC Re remains the top reinsurer by some margin, its market share has declined significantly, from 74.2% in 2019 to 51% in 2023. In contrast, global reinsurers in India’s top five are steadily increasing their market presence.
In addition, GIC Re’s market share may be further affected by the government’s plan to sell up to a 10% stake in the company, which would require it to maintain a minimum public shareholding of 25%.
In 2023, 39% of GIC Re’s total earnings came from obligatory business, while 61% came from non-obligatory business.
The company currently benefits from obligatory cession, with the IRDAI confirming in February that the cession rate would remain at 4% for FY2025–26. However, GIC Re is also facing renewed pressure from domestic insurers who are calling for the removal of the 4% obligatory reinsurance cession.
GIC Re’s weakening hold on the local market paves the way for foreign firms to gain a larger share. GlobalData says that licensed foreign reinsurers in India could hold over 50% of the market share this year, up from 49% in 2023 and nearly double the 25.8% recorded in 2019.
GlobalData attributes this development to a supportive regulatory environment, particularly the IRDAI (Re-insurance) Regulations, 2018, which allowed foreign reinsurance entities to establish offices in India.
The rise in overseas firms has also been driven by competitive pricing, more flexible terms compared to India’s top reinsurer, a growing economy, and increasing insurance penetration.
Providing further context on this trend, Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, says:
“The growth of foreign reinsurers’ business during 2020–23 was primarily supported by property and motor insurance, which together accounted for 70.8% of the total business for the top four foreign reinsurers in 2023.”
GlobalData also expects the overall Indian market to grow at a CAGR of 7.3% to reach 832.8bn rupees (US$9.7bn) in 2029. This, along with economic growth, will make India one of the most attractive destinations for reinsurers in the coming years.
“Foreign reinsurers will continue to increase their market share in the soft reinsurance market, as treaty renewal rates largely remain stagnant. Despite natural catastrophe risks, the competition among reinsurers will keep the rate from hardening,” Sahoo says.
