15 global reinsurers likely to seek GIFT IFSC entry
Fifteen reinsurers are expected to apply to set up offices at India’s only International Financial Services Centre (IFSC) in GIFT City, Gujarat, in fiscal year 2026-27, seeking to tap the country’s ₹1.12 trillion reinsurance market, said K. Rajaraman, chairperson of the International Financial Services Centres Authority (IFSCA).
“Now our focus is on seeing how the reinsurance entities actually undertake more substantial activities and also how to develop talent in the GIFT City ecosystem,” Rajaraman said, adding that some applicants may also require clearance from their home regulators before receiving in-principle approval.
A reinsurer is an insurer that provides insurance to other insurers, taking on part of the risks they have insured. There are currently 41 International Financial Services Centre Insurance Offices (IIOs) in GIFT City, and 26 reinsurers from 18 countries. Five applications from direct insurers are also under process, while another two direct insurers are expected to apply during FY27.
GIFT city benefits
Apart from tax benefits and being less capital-intensive, GIFT City’s higher position in the order of preference makes it an attractive option for foreign reinsurers seeking to establish branches in India.
The Insurance Regulatory and Development Authority of India (Irdai) prescribes an order of preference that Indian insurers must follow when placing facultative and treaty surplus reinsurance. The framework gives preference to the domestic reinsurer, General Insurance Corporation of India (GIC Re), followed by specified foreign reinsurer branches, IFSC-based insurance offices, and cross-border reinsurers, subject to applicable conditions.
“In 2024, the regulator imposed collateral requirements on cross-border reinsurers for reinsurance placements from FY26 onwards. That meant that if you wanted to reinsure as a cross-border reinsurer, you had to provide collateral to Indian insurers,” said Shivangi Sharma Talwar, partner at law firm JSA. “After the collateral requirements, many reinsurers that were operating as cross-border reinsurers set up offices in the GIFT City as Category II or Category III IIOs,” she added.
Reuters reported in January that some of the world’s biggest reinsurers, including Lloyd’s of London, are seeking Indian regulatory approval to operate in a low-tax city setup in Prime Minister Narendra Modi’s home state to rival other international financial hubs.
It said that global companies, including South Korea’s Samsung Re, Kenya Re and Spain’s Mapfre Re, will join more than a dozen global reinsurers from Europe, West Asia and Asia.
Mint reported on 1 September that GIC Re has flagged competition from GIFT City, while being optimistic about the overall sector.
Gross premiums underwritten by IIOs rose nearly fourfold to about $649 million in FY26 from about $162 million a year ago, driven by the expansion of reinsurance business and a doubling in the number of insurance offices and entities.
Market evolution
The Indian insurance ecosystem has moved from its foundational phase into a phase of scale, said Rajaraman.
The next phase is expected to involve insurers retaining more risk, building underwriting capabilities locally and using GIFT IFSC to write international business rather than serving only Indian cedents, Rajaraman said.
The IFSCA also expects the market to diversify beyond traditional reinsurance, with growth in life and health insurance and foreign-currency-denominated protection products. Proposed frameworks for insurance-linked securities, mutual insurers and protection and indemnity clubs are expected to broaden the range of risks and capital that can operate from the financial centre.
“We would like existing entities to expand as well as new ones to enter,” Rajaraman said. “That means building larger local teams, retaining more risk and using GIFT IFSC as a base for business written outside India.”
