Watsa’s Fairfax group gets nod for reinsurance company

Mumbai: Value Attics Reinsurance has received a reinsurance license from IRDAI, making it the first private-sector reinsurer after GIC Re. This ends the five-decade monopoly of the public-sector reinsurer. The approval was granted at IRDAI’s board meeting, which was the last under chairman Debasish Panda, whose term ends this week. The Govt has invited applications for the post.

Value Attics is backed by Canadian investor Prem Watsa’s Fairfax group and Kamlesh Goyal. Watsa, who has already floated Go Digit General and Life Insurance with Goyal, is expanding his presence in India's insurance sector. However, the reinsurance firm will not be linked to the direct insurance business.

Although IRDAI had in 2016 granted a licence to ITI Reinsurance, the company had not taken off. Before launching Value Attics, Watsa had attempted to acquire ITI Reinsurance from Sudhir Valia, but the deal was rejected by IRDAI.

Value Attics will begin operations with a paid-up capital of Rs 200 crore, bringing expertise from Watsa’s global reinsurance businesses while leveraging its balance sheet to underwrite large risks. Future investments are expected to be much higher, given that the promoters have already invested Rs 4,400 crore in Go Digit General Insurance and Rs 1,400 crore in Go Digit Life Insurance, which are less capital-intensive than reinsurance.

Fairfax has multiple subsidiaries engaged in reinsurance worldwide. These include Odyssey Reinsurance in Connecticut, which underwrites treaty and facultative reinsurance and specialty insurance, Allied World Assurance, which offers reinsurance through its subsidiaries, and Polish Re, which operates in Central and Eastern Europe.

In the board meet the IRDAI took stock of the progress of Risk-Based Capital (RBC) implementation and the status of Ind AS (IFRS) adoption in insurance companies, reflecting ongoing efforts to align with global financial standards. Status of risk based supervisory framework implementation was also discussed. The meeting also covered revisions in the Terrorism Pool framework.


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