Global Indian broker J.B. Boda Group is confident of insurance and reinsurance market growth opportunities in the country as it looks to be the bridge between counterparties in an expanding marketplace, according to Managing Director, Rohit Boda.
“Re/insurance growth in India is inevitable. The country has high economic growth, and it is one of the top five economies in the world right now, and foreign investment is coming in,” said Boda, in a recent interview with Reinsurance News.
According to Boda, who joined the company in 2011, the basic requirement of reinsurance in India is expected to expand as the country’s primary insurance market is growing significantly in all segments, notably energy, agriculture, food security, and those related to climate change and the weather.
“The cost of capital in India is not as high as the western world, so for insurers and reinsurers, I believe that there are massive capital gains to be made in the country,” said Boda.
“Risk management has to be supported by reinsurance, and new insurers are entering the market and they are coming to India for a reason. They see the region as a good investment, and with the reinsurance growth to support expansion, they see it as an industry that is making money in the long run. So, there’s clear signs that new players are here to stay and invest. Capital is growing in reinsurance and insurance in India.” he added.
Throughout 2023 and heading into the 2024 renewals, the reinsurance market has continued to firm, but as noted by Boda, this isn’t necessarily the case in India.
“In India, I would describe the market as semi-hard,” said Boda. “Currently, the country is in a unique position since the market is not as hard as it is outside of India.”
He explained that while Hurricane Ian and the subsequent tens in billions of dollars of losses was the main culprit last year, alongside inflation which has not reduced but stabilised somewhat, and further high nat cat losses in 2024, the global reinsurance market seems to be hardening, although it won’t be the same in India.
In terms of reinsurance price rises in India, Boda suggested that low double-digits would be acceptable.
“With new reinsurers coming in, clients are price sensitive but reinsurers are also not giving away their capacity and capital at cheap prices because their cost of capital is increasing. So, on average, we see a 10-12% increase as fine, but there’s a lot to consider,” said Boda.
JB Boda Group is a prominent broker in the India market, and with the renewals fast approaching, Boda explained to Reinsurance News that clients often question rising rates when they function locally.
“In the reinsurance segment in particular, it is important to make clients understand the current conditions of the global market with regards to increasing rates,” said Boda.
He emphasised the important role his firm plays at being the bridge between the insurer and reinsurer in the expanding Indian marketplace.
Boda explained that the Indian insurance markets are booming, driven in part by the efforts of the regulator, which has a focus on improving penetration.
“Insurance penetration has come to the mainstream, and in the next two decades as we celebrate our 100 years of independence, greater penetration is extremely feasible as a result of heightened awareness and the use of new and advanced technology,” said Boda.
Further, the Insurance Regulatory and Development Authority of India (IRDAI) recently approved certain amendments designed to promote a favourable business environment and position India as a global reinsurance hub.
The regulator is eager to increase the overall capacity of the reinsurance sector, and is looking to create an environment of excellence and innovation in order to attract greater investment.
