India’s general reinsurance sector may be undergoing shift, with overseas players rapidly expanding their footprint and domestic incumbents such as GIC Re seeing their market share slip from over 74 percent in FY19 to less than 51 percent in FY26.
The decline appears to be driven by losses from unprofitable crop insurance mandates and mounting competition from both foreign reinsurers and emerging domestic players.
The top five reinsurers -- four foreign majors, Munich Re, Swiss Re, Lloyd’s, and SCOR, and GIC -- command 95.4 percent of India’s reinsurance market. The remaining 4.6 percent is shared by smaller foreign reinsurers, cross-border players operating without an India branch, and niche domestic entities.
The foreign quartet has expanded its collective share from 25.8 percent in FY19 to 49 percent in FY25, each clocking double-digit growth. According to GlobalData, overseas players are on track to surpass the 50 percent mark in gross written premium (GWP) terms in FY26.
For decades, GIC Re was the primary backstop for the country’s insurance sector, aided by IRDAI’s “obligatory cession” rules that guaranteed it a fixed share of premiums. But the cession rate has been reduced over the years, from 20 percent in 2020 to 4 percent today, forcing GIC to fight for voluntary placements. “We are in talks with IRDAI to see how best we can handle this. Right now, I don’t think it will go below the 4 percent,” said CMD Ramasamy Narayanan, speaking to Moneycontrol.
Some insurers have reportedly opposed even the current 4 percent cession, arguing that GIC’s mandated terms result in lower commissions than they could negotiate in an open market. “For long, we have been telling IRDAI that it should be up to us to decide how much commissions to pay, so no insurer feels like they are being compromised," Narayanan said.
Crop insurance: A social mandate turned burden
One of GIC’s most pressing challenges seems to be its large exposure to crop reinsurance under the Pradhan Mantri Fasal Bima Yojana (PMFBY). This heavily subsidised scheme insures farmers’ crops, and most of the risk is ceded to GIC, as private reinsurers largely avoid because of its low margins and high claims volatility.
This situation is akin to public sector banks shouldering social mandates such as zero-balance Jan Dhan accounts or crop loans, which private banks tend to avoid, as one industry executive pointed out off the record. “Otherwise, the most profitable business will be siphoned away, leaving GIC Re with only the low-value residual portfolio,” the executive said.
Meanwhile, Maharashtra police booked over 40 service-centre operators for allegedly filing thousands of bogus crop claims, while Haryana has seen payouts under PMFBY plunge by up to 90 percent. The Centre has attributed the fall to reduced fraud and better targeting, but it has raised questions over coverage adequacy.
Agriculture insurance posted a loss ratio of 95.6 percent in FY23, the highest among all segments. These losses may have made GIC limit its capacity to compete in higher-margin areas such as property, marine, and specialty risks.
In Q1 FY26, agriculture still accounted for over Rs 2,060 crore in gross premiums for GIC Re, underscoring the company’s heavy exposure to the loss-making segment. Motor premiums grew nearly 17 percent, showing strength in a profitable and competitive line. Agriculture premiums rose 4 percent, but this remains low-margin, high-loss-ratio business.
The quarter also saw large losses from the Jindal Poly Films fire (Rs 2,300 crore) and the Air India aviation claim, pushing the incurred claims ratio to 90.42 percent, according to its financial results report.
Foreign and domestic challengers rise
Global reinsurers such as Swiss Re, Munich Re, and SCOR have significantly scaled up their India presence over the past five years.
Meanwhile, two domestic entrants are expected to add to the competitive intensity in the market. Jio-Allianz Re has newly entered the market with a 50:50 joint venture between Jio Financial Services and Allianz. Valueattics Re, backed by Canadian investor Prem Watsa and Oben Ventures, licensed earlier this year as India’s first private-sector reinsurer.
Both are expected to focus on high-growth segments like health, motor, and specialty lines, areas GIC is also targeting to reduce its dependence on crop insurance.
Leaning on overseas growth
Domestic premiums fell 3.6 percent year-on-year in Q1 FY26, while international premiums jumped 17.1 percent, now making up 19 percent of GIC’s portfolio, the highest in recent years for a first quarter. This suggests the reinsurer may be leaning more on overseas markets to offset home turf competition, in line with its long-term goal of achieving a 60:40 domestic-international mix.
GIC’s business degrew annually between FY20 and FY24 as it exited unprofitable lines, according to CMD Narayan, before returning to growth in FY24. Its combined ratio stood at 111 percent last year, with a goal to bring it down to 100 percent over the next seven years.
India’s reinsurance market is expected to grow at a 7.3 percent CAGR to Rs 832.8 billion by 2029, according to the GlobalData report.
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