According to reports, Go Digit General Insurance, an Indian-based insurtech subsidiary and part of Prem Watsa’s Fairfax Group, is seeking regulatory approval to launch a reinsurance entity.
India has just the one domestic reinsurance company, GIC. So this is seen as big news, as Prem Watsa backed Go Digit could become the second Indian reinsurance company, if all necessary approvals are granted.
CNBC said Go Digit has submitted a regulatory application to establish a reinsurance company, to operate as a general reinsurer.
The insurance regulator in India is likely to discuss the application at its next board meeting, due around the end of this month, or within the first weeks of July.
Reports suggest Go Digit will aim to capitalise its reinsurer with roughly double the required minimum.
The minimum is 200 crores, but Go Digit is said ready to inject 400 crores (about US $52m) into its proposed reinsurer, CNBC reported.
As the sole domestic reinsurance company, GIC already gets first right of refusal to provide quotes, after which foreign branches are allowed to quote.
If Go Digit does establish a reinsurer, it would get the second priority where it would be given a chance to match the quotes given by GIC and sign onto a reinsurance placement at the same terms.
The move would give Fairfax’s Watsa a foothold in the Indian reinsurance market with a domestic company, which would be preferable to one of his foreign re/insurers looking to enter the market there.
