Reinsurers are expanding in India despite a CRT-4 risk rating from AM Best, with Lloyd's of London joining PartnerRe Ltd. in establishing operations in GIFT City.

India’s CRT-4 designation indicates moderate economic risk and high political and financial system risk, according to AM Best. At the same time, the rating agency has maintained a stable outlook for the country’s non-life insurance segment, citing demand trends and regulatory developments reported in January 2026.

Recent policy changes point to a shift in market access. Legislative reforms passed in December 2025 propose removing the foreign direct investment cap for insurers, allowing up to 100% foreign ownership under the automatic route, subject to notification and conditions. The reforms also reduce capital requirements for foreign reinsurers and Lloyd’s entities from ₹50 billion to ₹10 billion, aligning thresholds across jurisdictions and lowering entry requirements.

Regulatory direction and system stability

The insurance sector remains under the supervision of the Insurance Regulatory and Development Authority of India, with governance and compliance requirements continuing despite ownership liberalization. The International Monetary Fund reported in February 2025 that broad financial stability metrics remain sound.

Policy priorities include attracting investment into strategic sectors and advancing initiatives related to climate resilience and the energy transition. Fiscal measures such as personal income tax concessions and increased government capital spending, alongside the potential for more accommodative monetary policy, continue to support consumption and investment, based on Best’s Country Risk Report.

GIFT City draws sustained reinsurer activity

Within this framework, Gujarat International Finance Tec-City has become a focal point for reinsurance activity. Lloyd's of London confirmed it received approval to establish an office in the International Financial Services Center.

The development follows a series of market entries. PartnerRe Ltd. obtained a license in February to open a branch in GIFT City, forming part of its Asia-Pacific reinsurance operations led by James Beedle. Additional reinsurers launching or receiving approvals in 2026 include Allianz Jio Reinsurance, Echo Re, Santam, MAPFRE Re, and Saudi Re, based on regulatory disclosures and company announcements.

Industry reporting indicates that more than 10 global reinsurers are licensed in GIFT City, with further applications under review. The centre operates as an International Financial Services Centre designed to facilitate cross-border insurance and reinsurance business.

Demand indicators support continued participation

Market data suggests underlying demand remains a contributing factor. Moody’s reported that total insurance premiums in India rose by 17% in the first eight months of FY 2025, compared with 7% growth in FY 2024. Insurance penetration stood at 3.7% of GDP in FY 2024, indicating capacity for further development.

Discussions at the Global Reinsurance Summit 2026 indicated that low insurance penetration, infrastructure expansion, and demand for products such as cyber coverage, parametric solutions, and surety bonds require additional reinsurance capacity and technical capability.

AM Best has also indicated that increased foreign participation may influence competition and operational efficiency over time.

PartnerRe Ltd. said its GIFT City branch will support Indian clients, improve responsiveness, and align with regulatory requirements while facilitating business operations.

Lloyd's of London and underwriting entities of PartnerRe’s parent, Société de Groupe d'Assurance Mutuelle Covéa, hold current Best’s Financial Strength Ratings of A+ (Superior).

The sequence of entries into GIFT City indicates continued participation by international reinsurers despite the country’s elevated risk classification, with regulatory changes and demand conditions shaping the operating environment.