French reinsurer, Axa Re, has received second stage R2 regulatory clearances from Indian regulator, IRDAI, to open a branch in the country.
The reinsurer hopes to begin operations in July when it receives the final round of regulatory clearances, R3, after completing its capital infusion plan, the Press Trust of India (PTI) reported.
The new branch represents the first time the firms opened a reinsurance branch outside of its base in Paris, Axa, however, has already been operating in India through joint insurance ventures with Bharti-Bharti Axa Life and Bharti Axa General Insurance.
“India is a matter of high priority for Axa Re. We are impressed with the country’s economic development and policy thrust of the NDA government and would like to expand our existing business in the country,” a Paris company source told PTI.
“We know the government is trying to develop India as global reinsurance hub and we would like to be a catalyst in this government effort.
“With a direct branch in the country, we will expand our portfolio into other general insurance segments of the country,” the source said.
Axa Re curently provides cover in India with an offshore business and holds an existing portfolio of $100-150 million focused on life and health.
The French reinsurer is following a trend of global reinsurance giants expanding operations into one of the fastest emerging re/insurance markets, after the country relaxed regulations to enable more risk transfer to foreign firms.
Despite some moves towards deregulation, the Indian market environment remains protectionist, offering first picks for re/insurance business to domestic firms and leaving foreign players to compete for the rest.