New India Assurance to set up reinsurance hub in GIFT City

MUMBAI: The country's largest non-life company New India Assurance has decided to set up a reinsurance office in GIFT (Gujarat International Finance Tec) City — the country's first international finance centre near Ahmedabad. The company sees a clear opportunity as this will enable it to leverage its balance sheet to provide cover to global insurance companies without running any currency risk.

"The insurance regulator has already come out with norms for insurance companies that want to set up an office in GIFT. We are already doing reinsurance business from our London office where we get business from Lloyds (which works like an insurance exchange). With an office here, we can write business from all parts of the world," said New India chairman G Srinivasan.

Although London has been the traditional hub of insurance, new centres are emerging in Singapore and Dubai. India is well placed to become an insurance hub because there are large companies which have the capacity to take on big risks on their balance sheet.

"We have an A-rating from AM Best and are the largest insurance company in the region. We were the largest in Asia, excluding Japan, but now some Chinese companies have grown in size," said Srinivasan.

According to sources, LIC is likely to invest in building a tower in GIFT and New India is likely to set up its office in the building. The advantage of setting up a reinsurance office in an international finance centre is that the money raised by way of premium can be retained in foreign currency accounts, which eliminates currency risks when claims are paid.