Bajaj Finserv Gets Board Approval to Enter Reinsurance Sector
Bajaj Finserv has got the board approval to enter into the reinsurance industry through a wholly owned subsidiary, subject to the IRDAI and other regulatory approvals. The deal boosts its insurance books and puts the company in India's growing reinsurance sector.
Following board approval, Bajaj Finserv Ltd will establish a wholly owned subsidiary to engage in the reinsurance industry. According to the company's exchange filing, the entry of the firm into the sector is contingent on regulatory approvals. The company stated in its statement on July 31 that the Board has approved the pursuit of reinsurance business through an upcoming subsidiary.
However, the firm said it will persue further subject to clearance from the Insurance Regulatory and Development Authority of India (IRDAI) and other authorities. Along with Bajaj Finserv's June quarter results, the announcement was made. Operating revenue increased 19.1% to INR 42,037 crore, while consolidated net profit increased 18.2% year-on-year to INR 6,297 crore.
Bajaj Finserv (BFS) uses its 51.30% ownership in Bajaj Finance (BFL) to manage its lending operations. Additionally, 86.70% of Bajaj Housing Finance (BHFL) is owned by Bajaj Finance.
Why Bajaj Finserv is Eager for Reinsurance Sector?
This would put Bajaj Finserv in the exclusive club of a few private companies operating in India's reinsurance sector, which is doing well. The Insurance Laws (Amendment) Act, 2015, and the regulations that followed were passed by the Insurance Regulatory and Development Authority of India (Irdai), allowing private companies and foreign investors to enter this market. With the changes, the monopoly of General Insurance Corporation of India was broken.
The Insurance Act, 1938 mandates that GIC RE, being the sole domestic reinsurer in India, receive a statutory mandatory cession, which is presently 4% of general insurance premiums. As a result of its 77.33% ownership in Bajaj General Insurance and Bajaj Life Insurance, which were previously run as joint ventures with Allianz, Bajaj Finserv is already well-established in the insurance industry. Bajaj Finance, its lending arm, also has a 51.3% stake. Since the market opened, foreign reinsurers have also increased their position. Mumbai is home to the majority of the twelve international reinsurance branches in India.
GIFT City Enhancing Growth of Reinsurance Sector
At GIFT City, where offshore insurance operations are regulated by the International Financial Services Centres Authority, growth has been much higher. The number of insurance entities housed by the IFSC increased from 18 the previous year to 36 as of 31 March 2026, with 22 of those businesses being reinsurers.
Allianz, Generali, Lloyd's, Peak Re, Saudi Re, Kuwait Re, Qatar Re, Korean Re, and Kuwait Re are among the recent arrivals at GIFT City.From $160.79 million in FY25, IFSC insurance offices underwrote gross premiums of $648.68 million in FY26. The reinsurance business is the main driver of the growth. Premiums for reinsurance rose from $147.13 million to $607.96 million throughout that time.
