Speaking to the press here on Wednesday, Swiss Re chief executive Walter B Kielholz denied that his setting up office now has any direct link to the current flurry of activity in the insurance sector.

"However, in an indirect way, we see more opportunity once many players enter the sector. We will be in a position to help existing players develop skills and expertise that are necessary when the sector is opened for competition," he said. He also made it clear that his company is only a reinsurance company and the present discussion on the entry of foreign insurance companies into India will not have any direct bearing on its business in India.

A reinsurer takes on that share of risk (particularly of large risks) which direct insurance companies cannot carry alone. These direct insurers, many of whomoperate only nationally or regionally, like Life Insurance Corporation (LIC) or General Insurance Corporation of India (GIC), cannot always diversify their risks adequately. The reinsurer restores the balance by spreading risks worldwide and over longer periods of time.

At present, Swiss Re has reinsurance business with Indian insurance monopolies, General Insurance Corporation and Life Insurance Corporation. These businessess are currently processed from its London office. The Indian office will be a representative office. The status of representative office does not permit Swiss Re to underwrite reinsurance business. For the time being, underwritting will remain with the head offices in Zurich and London, Swiss Re executive board member and Asia division head Pierre L Ozendo said. He, however, said that when the situation permits later, the company may undertake underwriting business from its Indian office.

As of now, Swiss Re will provide technical expertise of an international reinsurer to the Indianinsurance industry and support them with appropriate risk-management solutions customised to the needs of the local market. "Further the proximity to clients will enable Swiss Re to understand better the specific challenges presented by the Indian market," a press release from Swiss Re stated.

The Indian office will be the company's 15th office in the Asia Pacific region. Swiss Re, founded in 1863 in Zurich, is one of the world's leading reinsurers with roughly 8,500 employees and gross premiums of $11.94 billion in 1997.

Swiss Re has about 50 per cent of its current business coming in from Europe with another about 30 per cent from the US/Canada. All of Asia and the rest of the world is accounted for by the remaining 20 per cent. According to the company's long-term plan, in the next 10 years, Swiss Re expects to improve the Asia region share to about 30 per cent of its total business.