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New Delhi: In a major development that promises to disrupt Indias reinsurance sector Jio-Allianz and Valueattics Re—a joint venture between Fairfax’s Prem Watsa and Kamesh Goyal’s Oben Ventures—have announced their entry into the market challenging the might of state-run GIC Re in the countrys Rs 50000-crore reinsurance business. It is important to note that GIC Re currently has a 51% market share while the rest is distributed among 11 foreign reinsurance branches. Jio Financial Services (JFSL) and Allianz Group (Allianz) on Friday through its wholly owned subsidiary Allianz Europe BV announced they have entered into a binding agreement to form a 50:50 domestic reinsurance joint venture in the insurance market in India. Here are some of the key details: Jio Financial Services (JFSL) and Allianz Group (Allianz) announced they have entered into a binding agreement to form a 50:50 domestic reinsurance joint venture in the insurance market in India. The two companies entered into a non-binding agreement for setting up equally owned joint ventures for both general and life insurance businesses in India. Both the companies will challenge the dominance of state-run GIC Re in the countrys Rs 50000-crore reinsurance business. Regulatory norms such as mandatory cession and order of preference could benefit the new entrants Regulations mandate Indian insurers to cede 4 percent of each policy to GIC Re. It is important to note that this would be Allianzs third reinsurance entity after its existing branches under the Foreign Reinsurer Branch (FRB) and International Financial Services Centre Insurance Office (IIO) regimes. This proposed company would be an India-incorporated entity with a paid-up capital of a minimum Rs 200 crore. While the other two reinsurance entities focus on specialized reinsurance and specific risk segments the third entity—an Indian reinsurer—will operate with an independent balance sheet and have the flexibility to offer both treaty and facultative reinsurance. All You Need to Know About GIC Re GIC Re is a national reinsurer The company has long been the anchor of the domestic reinsurance market. In 2023-24 a total reinsurance premium of Rs 62113 crore was collected by Indian reinsurer GIC Re and foreign reinsurance branches (FRBs). About 81 percent of this business came from within India which is Rs 50553 crore. Of this Indian business GIC Re handled around 51 percent while the remaining 49 percent was done by the foreign reinsurance branches including global reinsurers like Lloyds. It is important to note that the Reinsurers operating from within India like Jio-Allianz and Valueattics Re could get preferential access over cross-border reinsurers in the order of preference mandated by IRDAI. What Does the IRDAI guidelines say? As per IRDAI guidelines every Indian general insurer must cede 4% of their sum insured on each policy to GIC Re- the Indian reinsurer under compulsory cession rules.