MUMBAI: Value Attics Reinsurance has received a reinsurance licence from insurance regulator Irdai, making it the first private-sector reinsurer. This ends the five-decade monopoly of the public-sector reinsurer GIC Re. The approval was granted at Irdai’s board meeting, the last meet under chairman Debasish Panda, whose term ends this week. Govt has invited applications for the post.
Value Attics is backed by Canadian investor Prem Watsa’s Fairfax group and Kamlesh Goyal. Watsa, who has already floated Go Digit General and Life Insurance with Goyal, is expanding his presence in India’s insurance sector. However, the reinsurance firm will not be linked to the direct insurance business.
The company will begin operations with a paid-up capital of Rs 200 crore, bringing expertise from Watsa’s global reinsurance businesses, while leveraging its balance sheet to underwrite large risks. Future investments are expected to be much higher, given that promoters have invested Rs 4,400 crore in Go Digit General Insurance and Rs 1,400 crore in Go Digit Life Insurance, which are less capital-intensive than reinsurance.
Fairfax has many 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.
Before launching Value Attics, Watsa had attempted to buy ITI Reinsurance from Sudhir Valia, but the deal was rejected by Irdai over concerns that it amounted to trading licences, which is not permitted under Indian regulations. In board meet, Irdai took stock of the progress of Risk-Based Capital implementation and the status of Ind AS adoption in insurance companies, reflecting ongoing efforts to align with global financial standards.