Foreign reinsurers’ market share in India to cross 50% in 2025: GlobalData

Licensed foreign reinsurers continue to expand their market presence in India, with their share, in terms of gross written premiums (GWP), almost doubling from 25.8% in 2019 to 49% in FY24. Their market share is estimated to cross 50% in 2025, according to GlobalData, a data and analytics company.

The data reveals that the Indian reinsurance market is concentrated, with the top five reinsurers—four foreign reinsurers and one domestic reinsurer—accounting for 95.4% of the GWP in 2023. The market share of the top four foreign reinsurers increased from 19.4% in 2019 to 44.4% in 2023.

The expansion of foreign reinsurers is attributed to a supportive regulatory environment, competitive pricing, flexible terms compared to General Insurance Corporation of India (GIC Re), a growing economy, and increasing insurance penetration. All the top four foreign reinsurers' GWP registered double-digit CAGR during 2019-23.

Although GIC Re retained its leading position in 2023, its market share has declined significantly from 74.2% in 2019 to 51% in 2023. Foreign reinsurers such as Munich Re and Swiss Re continued to increase their market share and emerge as a threat to GIC Re, the report noted.

“Reduction in obligatory cession rate, losses from agriculture reinsurance, and decline in non-obligatory business have reduced the market share of GIC Re. Additionally, the Irdai (Re-insurance) Regulations, 2018 allowed foreign reinsurers to establish branch offices and write local reinsurance business. The competition will further intensify with the entry of new reinsurers into the market, such as Valueattics Reinsurance in 2025,” said Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData.

According to the report, obligatory business accounted for 39% of the total earnings of GIC Re, whereas the remaining 61% was contributed by non-obligatory business in 2023. The company enjoys the advantage of obligatory cession and the first right of refusal. However, this is also expected to end soon as insurers have started opposing obligatory cession due to the unfavorable commission rates. As insurers are financially strong and have adequate underwriting capacity, the arrangement of obligatory cession rate is no longer required, it added.

Additionally, the government is planning to sell up to a 10% stake in GIC Re as part of the Sebi guidelines, which make it mandatory for listed firms to maintain a minimum public shareholding of 25%, which is expected to further impact the company’s market share in 2025.

“General insurers in India mostly cede property, motor, and personal accident and health (PA&H) business, which accounted for 84.6% of the total reinsurance in 2023, in terms of reinsurance ceded premiums. 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,” said Sahoo.

“The four foreign reinsurers accounted for 50% of the overall Indian motor reinsurance ceded business in 2023 and 26% of the overall property reinsurance ceded business,” he added.

Rising losses incurred in these lines are driving reinsurance business growth. In 2023, the property insurance loss ratio stood at 83.6%, whereas for agriculture insurance it was 95.6%. Similarly, the loss ratio was 87.5% for PA&H and 80.6% for motor insurance.

India’s reinsurance market to see a CAGR of 7.3%

GlobalData forecasts the reinsurance market in India to register a CAGR of 7.3% to reach ₹83,280 crore ($9.7 billion) in 2029. This, along with growth in the economy, will make India one of the attractive destinations for reinsurers in the coming years. Regulator Irdai has also been working to expand the domestic reinsurance market, it added.

“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,” said Sahoo.

The initiative from Irdai to increase insurance penetration under its ‘Insuring India by 2047’ will also support the growth of the reinsurance market during 2025-29. The market is expected to welcome more reinsurers in the coming years, which will increase competition and reduce the market share of GIC Re further, he added.