Context:
Jio Financial Services Ltd (JFSL) and Allianz Germany have incorporated a joint venture company named Allianz Jio Reinsurance Ltd (AJRL) to operate in the Indian reinsurance sector, reflecting the growing demand for risk management solutions in the country.
What is a Reinsurer?
- A reinsurer is an insurance company that provides insurance to other insurance companies.
- It helps share or transfer risk, especially for large or catastrophic exposures, so that no single insurance company bears the entire risk.
- Example: If an insurance company covers a huge industrial project, it may cede a portion of the premium and risk to a reinsurer like Allianz Re.
Key Functions of a Reinsurer:
- Risk diversification for insurers.
- Protection against huge claims.
- Financial stability of insurance companies.
- Capacity building for large-scale insurance coverage.
Types of Insurance
| Type of Insurance | Description | Examples |
|---|---|---|
| Life Insurance | Covers death, disability, or survival risks. Provides financial security to dependents. | Term insurance, Endowment plans, ULIPs |
| General (Non-Life) Insurance | Covers property, health, vehicles, liability, etc. | Health insurance, Motor insurance, Home insurance, Travel insurance |
| Reinsurance | Insurance for insurance companies to share/transfer risk. Can be treaty-based (portfolio) or facultative (specific risk). | Allianz Re, Swiss Re, GIC Re (Only Indian reinsurer company in India) |
| Microinsurance | Low-cost insurance for low-income populations. | Crop insurance for small farmers, Livestock insurance |
Who Regulates Insurance in India?
- Regulator: Insurance Regulatory and Development Authority of India (IRDAI)
- Established: 1999 (under IRDA Act, 1999)
