The specialist insurance market will start with a couple of syndicates in Mumbai

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Lloyd’s of London will open up its branch in India early next year, according to Lloyd’s chairman John Nelson.

It has applied for a license to the Indian insurance regulator IRDAI to operate in India and currently underwrites Indian business on an off-shore basis.

Nelson said: “We will start our India operation with just couple of syndicates and would scale up gradually. We would target 8-10% growth in Indian markets.

“With high economic growth, India is a high priority country for us. We will start our Indian operations with two syndicates and would grow our business in the country gradually by offering solutions for complex and specialist risks like infrastructure, energy, director and officer liability, trade credit, terrorism, and disaster management. For us Indian market from the day one will be a high competitive market as other global reinsurers are also starting their operations in the country.”

India has significant vulnerability to natural catastrophes and yet there is significant underinsurance in the region, according to Lloyd’s.

“Insurance penetration is directly linked to country’s GDP growth,” added Nelson. “One per cent higher insurance penetration will spur larger economic growth in the country.”

Nelson said that Lloyd’s onshore presence in India would contribute to the development of a more diverse reinsurance market, which is fundamental to stability and future growth of the Indian economy.