In a landmark development for India's insurance sector, the Insurance Regulatory and Development Authority of India (IRDAI) has granted a certificate of registration to Valueattics Reinsurance, marking the end of General Insurance Corporation of India's (GIC Re) five-decade monopoly in the reinsurance business. This decision, taken during IRDAI's 129th meeting on 12 March 2025, represents a significant shift in India's reinsurance landscape that has been dominated by the public sector since 1972.
Valueattics Reinsurance, backed by Canadian investor Prem Watsa's Fairfax group through FAL Corporation and entrepreneur Kamesh Goyal through Oben Ventures LLP, has received the R2 licence, bringing it one step closer to commencing operations. The company will become operational after meeting the requirement of bringing in the necessary initial capital which is reported to be Rs210 crore.
"This marks a significant step in fostering competition within the reinsurance sector," IRDAI stated in its release. The regulatory approval came during the last board meeting chaired by Debasish Panda, whose term as IRDAI chairman ended that week.
For Prem Watsa and Kamesh Goyal, Valueattics Reinsurance represents a strategic expansion of their insurance footprint in India. The duo are already promoters of Go Digit General Insurance and Go Digit Life Insurance. With the addition of reinsurance to their portfolio, they aim to provide comprehensive insurance solutions.
"There was a longstanding need to have private reinsurance players in India, and becoming India's first private reinsurer marks a significant milestone for us. With this, the Digit group of companies will strive to become a one-stop solution for all insurance needs, allowing us to provide full-spectrum risk coverage," Mr Goyal said in a statement.
While Valueattics will initially operate with a paid-up capital of Rs210 crore, industry experts anticipate future investments to be substantially higher, considering that the promoters have already invested Rs4,400 crore in Go Digit General Insurance and Rs1,400 crore in Go Digit Life Insurance.
Fairfax brings considerable global reinsurance expertise to the table through its multiple subsidiaries engaged in reinsurance worldwide. These include Odyssey Reinsurance in Connecticut, which underwrites treaty and facultative reinsurance and specialty insurance; Allied World Assurance, which offers reinsurance through its subsidiaries and Polish Re which operates in Central and Eastern Europe.
This international experience is expected to enhance Valueattics' capabilities in underwriting large risks while leveraging its balance sheet.
It's worth noting that this isn't the first attempt to establish a private reinsurer in India. In 2016, ITI Reinsurance had received approval from IRDAI but surrendered the license without conducting any business due to operational factors. Later, in December 2018, IRDAI rejected a proposal from Go Digit to acquire ITI Re, which was set up by Sudhir Valia-backed The Investment Trust of India. Before launching Valueattics, Mr Watsa had attempted to acquire ITI Reinsurance, but the deal was rejected by IRDAI over concerns that it amounted to trading licenses, which is not permitted under Indian regulations.
Currently, GIC Re, which has been operating since 1972, enjoys the advantage of first right to refusal and obligatory cession. As of 31 December 2024, obligatory business accounted for 39% of GIC Re's domestic earnings, while 61% was non-obligatory.
In addition to GIC Re, there are 13 foreign reinsurance branches (FRBs) established by global reinsurance companies, including Munich Re, Swiss Re and Lloyd's of London, operating in India.
The same IRDAI meeting also retained the domestic systemically important insurers (D-SIIs) tag for Life Insurance Corporation of India (LIC), The New India Assurance Company, and GIC Re for 2024-25. D-SIIs are insurers whose distress or failure would result in significant dislocation in the domestic financial system and are subjected to enhanced regulatory supervision.
Additionally, the board reviewed various initiatives, including the proposed insurance e-marketplace Bima Sugam, Indian Risk-Based Capital (RBC) implementation, Risk-Based Supervisory Framework, and the status of Ind AS (IFRS) adoption in insurance companies. The meeting also discussed the State Insurance Plan, which is under active consultation and aims to facilitate localized identification of protection gaps and coverage through a multi-tiered governance model.
The entry of Valueattics Reinsurance into the market represents a watershed moment for India's insurance sector, promising increased competition, innovation and capacity in the reinsurance landscape that has been dominated by a single public-sector entity for nearly five decades.
