Benfield set to make India foray

Benfield, the third largest reinsurance broker in the world with an annual turnover of $590 million, will enter India shortly through a joint venture with IRICS, a Mumbai-based firm. Benfield will pick up 26 per cent in the venture while IRICS will have the balance 74 per cent as per the current law.

Benfield has been represented in India by IRICS for over 20 per cent now. "We are formalising the relationship which has been based on trust," Andrew Clarke, managing director of Benfield told a visiting team of Indian journalists here.

Benfield joins a growing queue of reinsurance companies led by Munich Re which want to come to India. So far 29 of these companies have registered in India to conduct reinsurance business, of which only four have a reinsurance-only licence. "India has 195 insurance and insurance brokers. And a majority of them are 100 per cent local-owned. Benfield will bring in the edge of its international expertise," Clarke said.

Clarke said India has tremendous potential but the development of the non-life insurance sector has a lot of catching up to do. Despite its huge population, India accounts for just $4.8 billion non-life insurance premium compared to $106 billion in Japan, $20 billion in South Korea and $17 billion in China. The second most populous country in the world is placed 27th in the world and fifth in Asia in non-life premium.

Clarke said quite a few domestic markets are usually undercapitalized and lack expertise. Intermediaries like Benfield make reinsurance capital available, spread and diversify risk and support smaller insurers in developing markets.

Benfield is a market leader in all forms of property catastrophe reinsurance business. More than 65 per cent of its business is property catastrophe reinsurance and the company has over 1000 dedicated specialists worldwide. The company, which has over 18 years expertise in structuring programmes for government schemes around the world, has an estimated 25 per cent of the global market share in property catastrophe.

The company launched Benfield Corporate Risk, which is a corporate insurance and risk intermediary offering world-class capability in the marine, energy, power, mining, political risk, casualty, property, aviation and space sectors.

On the outlook for the global reinsurance industry, Clarke said the reinsurance market's rapid recovery from major loss events in 2001 and 2005 suggests that contrary to received wisdom, it is adapting to the demands imposed by escalating catastrophe losses. This is just as well, as most forecasts suggest that another benign year for catastrophe is unlikely in 2007.