The Board of Directors of Bajaj Finserv has approved the company's entry into the reinsurance sector, contingent upon receiving approval from the Insurance Regulatory and Development Authority of India (IRDAI). This move makes Bajaj Finserv the third private participant to announce plans to enter the domestic reinsurance market in approximately one year.
This decision comes amid increasing competition in the Indian reinsurance market, which was opened to private players nearly 25 years ago.
In March 2025, Valueattics Re, supported by Prem Watsa and Kamesh Goyal, became the first private reinsurer to enter the market, which for a quarter of a century was dominated by the state-owned General Insurance Corporation of India (GIC Re).
Earlier this year, IRDAI issued a license to Allianz-Jio Reinsurance to commence operations. Allianz Group joined forces with Jio Financial Services to enter the reinsurance, life insurance, and general insurance business after concluding its partnership with Bajaj Group in life and non-life insurance, which lasted about 25 years.
Industry sources report that at least two more players may join soon to enter the reinsurance sector.
Experts note that the growth in the Indian reinsurance market is driven by several factors, including economic growth, regulatory reforms, rising demand for insurance, and a broader strategic trend towards retaining risks, premiums, and underwriting capacity domestically.
According to a reinsurance expert, the entry of large Indian corporations into reinsurance is dictated by the changing dynamics of the sector. The direct insurance market has become more competitive as insurers primarily compete for the same contracts, leading to increased regulatory scrutiny. Currently, reinsurance presents an attractive opportunity for corporations with significant capital, as it allows them to participate in the history of India's insurance growth by providing risk coverage, supporting insurers, and creating scalable operations with a more focused and lean business model.
The expert also added that the transition to a Risk-Based Capital (RBC) system will make reinsurance even more important, as insurers will require effective solutions for managing solvency requirements and optimizing capital.
The state-owned GIC Re, operating in the business since 1972, remains the largest player in the Indian reinsurance market. After the liberalization of the insurance sector in 2001, GIC Re was designated as the national reinsurer, giving it the advantage of first refusal and mandatory transfer. The government has gradually reduced the mandatory transfer to 4 percent in the financial year 26 compared to 20 percent previously. As of March 31, 2026, mandatory business accounted for 42 percent of GIC Re's domestic business, and non-mandatory business accounted for the remaining 58 percent.
Debashish Banerjee, Partner and Head of Insurance Sector at Deloitte, stated: 'India's GDP is growing, which leads to an increase in available capital. Significant investments have been made in infrastructure, and large infrastructure projects require insurance, which in turn creates demand for reinsurance. Furthermore, insurance reforms, particularly the allowance for 100 percent Foreign Direct Investment (FDI), have stimulated more companies to enter the direct insurance market in India, which naturally increases the demand for reinsurance. Also, the risk-based capital regime has made the market much more attractive.'
Banerjee added: 'Large conglomerates such as Reliance and Bajaj in India view this as an opportunity and an untapped space. Consequently, substantial growth is expected in specialized and diversified reinsurance portfolios.'
Currently, besides GIC Re, there are 12 Foreign Branch Offices (FBOs) of reinsurance companies established by global reinsurers. These include Munich Re, Swiss Re, Hannover Re, and Lloyd's of London. Additionally, about 291 Cross-Border Reinsurers (CBRs) operate in India.
According to IRDAI's annual report for the financial year 25, the total size of the reinsurance market in India reached 1.12 trillion rupees, and the gross reinsurance premium written by Indian reinsurers and FBOs amounted to 69,228.64 crore rupees. Of this volume, Indian business constituted about 85 percent, and foreign business constituted the rest.
Several reinsurers also operate through GIFT City via Insurance IFSC offices (IIOs). Experts believe that the Indian reinsurance industry will grow by 8–20 percent.
Ashvin Parekh, Managing Partner at Ashvin Parekh Advisory, noted: 'Perhaps Bajaj assessed this opportunity after Allianz's exit. Overall, with the emergence of new players, the industry has also realized that reinsurance is not as capital-intensive a business as previously thought. Supportive regulations and the priority order for business placement have further increased the sector's attractiveness. The recent surge in interest is more due to a change in market perception, as companies recognize the commercial opportunity after observing successful participants.'
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