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India, Germany join hands in the insurance sector
© dpa
Germanyís Hannover Re, Indiaís GIC Re tie-up for reinsurance

June 25, 2008

German reinsurer Hannover Re and India’s General Insurance Corporation of India (GIC Re) have agreed to cooperate in the joint development, marketing and underwriting of life reinsurance business in India.

Hannover Re, the world’s fifth largest global reinsurance company, is looking to tap the fast-growing Indian market. With a population of 1.1 billion and a growing middle-class, India offers the reinsurers immense growth potential for the medium-term, particularly in the life insurance sector.

Reinsurers sell backup coverage to other insurers, spreading the risk so the system can handle large or widespread losses.

Initially planned for the next five years, the cooperation aims to “jointly build up a profitable portfolio with strong growth potential in the highly promising Indian market,” said Hannover Re in a statement. It will provide technical knowledge and training to GIC’s staff. The domestic reinsurer, GIC Re, will offer inputs on the Indian market to Hannover Re.

Wolf S. Becke, CEO of Hannover Life Re said,  "We are delighted that we are now in a position to maximise these market opportunities jointly with GIC Re and are pleased to have reached an agreement that is very fruitful for both parties."

Indian government-owned GIC set up its life reinsurance department in 2002 and began operations in 2003. GIC’s reinsurance premium outgo from the life insurance market in India was around Rs 200 crore for the year 2006-07.

Hannover Re is also planning to set up a service company in Mumbai, which is expected to start work later in 2008, but the Indian business would be underwritten from Germany.

by Sakshi Arora
© German Information Centre New Delhi
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