Chat with Ravi Naidu, founder of new reinsurer company SEY Re ‘Seychelles is a fast-developing centre of insurance business in the region’ |27 February 2021
A new reinsurer company, SEY Re Limited, was launched in Seychelles late last year. SEY Re was incorporated in September 2020 in the Republic of Seychelles and received its license from the Financial Services Authority (FSA) in December 2020. SEY Re aims to leverage on possible domestic support and focus on building a robust base in the reinsurance sector in Seychelles and the African continent.
Seychelles NATION had a chat with the founder of SEY Re Limited, Ravi Naidu, to know more about this new venture.
Seychelles NATION: What is the business about?
Ravi Naidu: The significant amount of reinsurance premiums ceded to overseas reinsurers annually is of great concern. The setting up of SEY Re addresses this by retaining reasonable amount of foreign exchange within the country for the development of Seychelles. SEY Re aims to find investors to purchase up to US $10 million of share capital in the company to participate in the exciting growth prospects of a national reinsurer in the Republic of Seychelles with a potential access to the African continent. In addition, the Seychelles government has provided good incentives for those requiring reinsurance in the country, by allowing a 15% VAT waiver on reinsurance premiums with plans to support the local market and help develop new insurance products on the islands. SEY Re will ensure that local insurers are less dependent on overseas reinsurers (thus will indirectly help the State as transfer of reinsurance capital shall be reduced).
Seychelles NATION: You said it is the first reinsurer venture in Seychelles, how risky is it? Why do you think Seychelles did not have any such business before?
Ravi Naidu: Yes, it is the first – registered first in 2010 with focus in Seychelles business (overseas businesses – inward reinsurance business was secondary then) but the project was shelved as prospective local stakeholders were not optimistic that revenues generated locally would ensure profitability. I was in Dubai and could not pursue with the project.
Seychelles NATION: What will be the opportunities for Seychellois and foreign investors in Seychelles?
Ravi Naidu: This venture will be rewarding for Seychellois based on the updated business plan/actuarial report. For foreign investors, this will be double bonanza, rewarding and shall enable them to use Seychelles as a gateway to Africa.
Seychelles NATION: Tell us more about your products
Ravi Naidu: We offer facultative reinsurance cover in a seamless manner. The retro facility would allow automatic acceptance for selected classes such as but not limited to property, marine, engineering, financial lines and schemes of national significance. Local insurers can avail the reinsurance capacities locally, thus, the payments in forex can be dispensed.
Seychelles NATION: In these trying times, what is the prospect of your business?
Ravi Naidu: Key drivers being reinsurance brokers and overseas reinsurers under the Alliance Program, will place businesses with SEY Re. In percentage terms, we are looking at 70% from overseas and 30% from Seychelles. You will note that dynamics have changed since 2010 and by this model, SEY Re is positioned to generate significant income in dollars to assist the economy besides its objective of mitigating the outflow of foreign exchange from Seychelles (local insurers). Based on the network built by the senior management with combined experience of over 60 years, the company is expected to generate in excess of US $5 million annually.
To conclude, Mr Naidu noted that Seychelles is a fast-developing centre of insurance business in the region with an insurance market of US $27.5 million realised in 2018.
“The Seychelles insurance industry cedes an amount of US $10 million as reinsurance premium annually to overseas reinsurers. SEY Re, with the right structure, optimum capitalization and retro arrangements, is aiming to assist local insurers to be less reliant on overseas reinsurers and motivate regional reinsurance brokers to generate inward businesses.”
Vidya Gappy