ITI Re was the first private sector reinsurer to start operations
Six months after it signed a deal to acquire ITI Reinsurance, Go Digit Infoworks Services is still awaiting regulatory clearance. The license of ITI Reinsurance, the only Indian private sector reinsurer, is valid until December 29, 2018.
In June 2018, it was announced that Investment Trust of India will sell 80 percent of the holding in its subsidiary ITI Reinsurance to Go Digit Infoworks Services backed by Prem Watsa of the Fairfax Group.
When asked if IRDAI has raised any concerns, Chintan Valia, Promoter and Chairman of ITI Group and a director on the ITI Reinsurance board told Moneycontrol they have not received any objections from IRDAI. ITI started operations two years ago.
Chintan is the son-in-law of Sudhir Valia who is the brother-in-law of Sun Pharma Managing Director Dilip Shanghvi. ITI Group runs an array of businesses in the financial services space.
While the Investment Trust of India (earlier called Fortune Financial Services) holds 80 percent stake in the reinsurance entity, Lakshdeep Investment & Finance and Suraksha Realty hold 10 percent each.
During the signing of the deal, the company had announced that it will take around three months to complete the sale from the date of receipt of approval from IRDAI.
Investment Trust of India had a consolidated revenue of Rs 336.43 crore in FY18. Of this, ITI Re contributed Rs 41.66 crore.
The reinsurance space in India has General Insurance Corporation of India (GIC Re) as the sole state-owned company. They have the first right to refusal for treaties meaning only if they refuse a particular business do other reinsurers get an opportunity to write the business.Apart from ITI Re, several global reinsurers operate in India through their India branch. All of them are subject to the first preference norm and get access to business only if GIC Re refuses to take them on their books.