India needs to open up more to become a reinsurance hub, says JLT's Dominic Burke

JLT, the world's fourth largest insurance broker, wants to cater to high-end and complex risks in India as the government opens up the insurance market. In an interview with ET , JLT Group chief executive Dominic Burke spoke about business strategy and a newly formed joint venture with Chennai-based Sunidhi Group. Edited excerpts:
You are in India a decade and a half after the sector opened up.

If I go back to 2005 when I took over, we decided to be a specialty broker. We wanted to be market leaders in things like oil and gas, aviation, financial institution and marine. Back in 2005, we had 4,000 people, and now we have 11,000 people. We have got scale, reputation and brand. We have always had the reputation of driving the best deal in the most transparent way. Only after we got scale, reputation and brand we thought we can have more expansion. There were cultural barriers but we started to understand (in) India. We decided to be in high-end risks and complex risks where real expertise is required. Your government has done away with so many restrictions that it made it easier for us. We operate with similar joint venture partners in many countries.

Will you increase your stake in JLT India since the Insurance Bill has got passed in the Parliament?

We would like to own more of JLT India. We are contractually entitled to do that. If the government allows us to go up to 49% we will do that in due course.

The Insurance Bill allows reinsurance companies to open office in India. How will that change the insurance industry?

One is international capital coming to India. In 2005, when I became chairman I had hardly travelled the world. So 10 years later, the world has become global. I couldn't conceal the fact that we had 1,400 people in Mumbai — some actuaries, analytics, pension, HR expertise. They are a great support to the 10,000 people around the world. The world is so connected. Clients are looking globally at a risk transfer. Capital has got to be fungible. We are a client-first organisation. I can't have barriers of entry.

Can India become a reinsurance hub?

Not without substantial overseas companies. Consolidation is going on — Catlin merged with XL. I think if India wants to become a reinsurance hub it needs to liberate and open its market more. What is becoming a reinsurance hub is Dubai. Dubai created an economic zone, gave liberalisation around licences, and how you can treat ownership. It has seen a huge inflow. If you want to create a hub you don't just need capital but intellectual capital, actuarial capabilities, brokers to analytics, reinsurance Not without substantial overseas companies. Consolidation is going on — Catlin merged with XL. I think if India wants to become a reinsurance hub it needs to liberate and open its market more. What is becoming a reinsurance hub is Dubai. Dubai created an economic zone, gave liberalisation around licences, and how you can treat ownership. It has seen a huge inflow. If you want to create a hub you don't just need capital but intellectual capital, actuarial capabilities, brokers to analytics, reinsurance, loss assessors and forensics. You got to start trade in it, get university courses. India can aspire to become one. The government needs to have a clear path. It needs to set the policies right or it could miss the bus.