J.B. Boda Group, a global Indian broker, expresses confidence in the burgeoning opportunities for growth in India’s insurance and reinsurance market. Managing Director Rohit Boda sees the company as a crucial link between counterparties in this expanding marketplace.
In a recent interview with Reinsurance News, Boda highlighted the inevitability of insurance and reinsurance growth in India. With its high economic growth, ranking among the top five economies globally, and increased foreign investment, the country’s primary insurance market is experiencing significant expansion across various sectors, including energy, agriculture, food security, climate change, and weather-related areas.
Boda emphasized the lower cost of capital in India compared to the Western world, making it an attractive prospect for insurers and reinsurers. He believes there are substantial capital gains to be made in the country, stressing the importance of reinsurance to support risk management.
The Managing Director pointed out that new insurers are entering the Indian market, viewing it as a lucrative investment with long-term profitability. Boda sees clear signs that these new players are here to stay and invest, indicating a growing capital base in the reinsurance and insurance sectors in India.
While the global reinsurance market has been firming throughout 2023 and heading into the 2024 renewals, Boda described the Indian market as “semi-hard.” Despite challenges like Hurricane Ian and subsequent losses, inflation, and high natural catastrophe losses in 2024, India’s market is not as firm as its global counterparts.
Regarding reinsurance pricing in India, Boda suggested that low double-digit increases would be acceptable. He explained that clients are price-sensitive, but reinsurers are cautious about not undervaluing their capacity and capital, considering the increasing cost of capital. Boda indicated that a 10-12% average increase would be reasonable, taking various factors into account.
J.B. Boda Group, a prominent broker in the Indian market, plays a crucial role as a bridge between insurers and reinsurers in the expanding Indian marketplace. Boda noted that the Indian insurance markets are thriving, driven, in part, by regulatory efforts to improve penetration.
He mentioned that insurance penetration has become mainstream, and with increased awareness and the use of advanced technology, greater penetration is feasible in the next two decades. The recent approval of certain amendments by the Insurance Regulatory and Development Authority of India (IRDAI) aims to create a favorable business environment and position India as a global reinsurance hub. The regulator seeks to enhance the overall capacity of the reinsurance sector, fostering an environment of excellence and innovation to attract greater investment.
