GIFT City ILS Success Hinges on Clear Objectives, Says Peak Re

The ambition to establish India’s GIFT City as a hub for insurance-linked securities is gaining momentum. However, as Iain Reynolds, Head of Third-Party Capital at Peak Re, noted at the IFSCA-IRDAI-GIFT City Global Reinsurance Summit 2026 today, success requires more than just a regulatory framework, it requires a clear focus on what the regime is trying to achieve. The International Financial Services Centres Authority (IFSCA) and GIFT City have been working on plans to develop insurance-linked securities (ILS) regulation within India for some time, including exploring the issuance of instruments such as catastrophe bonds Last year, the panel, a Working Group (WG), consisting of industry experts within Alternative Risk Transfer (ART) arrangements, published a report outlining how the IFSCA can play a crucial role in making India a hub for catastrophe bonds. The topic was also a focal point at last year’s Federation of the Afro-Asian Insurers & Reinsurers (FAIR) General Assembly in Mumbai, where experts and leaders discussed how ILS and cat bonds can help close India’s insurance protection gap. Speaking at today’s summit in Mumbai, Reynolds was explicit: to develop the necessary infrastructure, policymakers must decide which segment of the market they are targeting. “So, we see ILS regimes being implemented in Singapore and Hong Kong and perhaps I can share some of my observations, what has worked and what hasn’t worked, or pick other things to consider in developing a regime here,” Reynolds said. “The first comment I would make is that to develop this infrastructure in GIFT City, you need to be very clear about what it is you’re trying to achieve.” He continued: “Are you trying to achieve more efficient risk transfer in the insurance industry here? Are you trying to create an ecosystem for international trading of these instruments? Are you looking to create an investment opportunity for local asset managers? There are lots of private equity offices, lots of family offices in India, who could be interested in this asset class. All of these approaches require different thinking.” Reynolds pointed out that Hong Kong and Singapore used their grant schemes for ILS as a lever to develop local infrastructure, often stipulating a minimum spend on local service providers “Something Singapore and Hong Kong have done very successfully is to create a grant scheme for ILS and I think that’s a very useful instrument for issuing smaller instruments into the market,” he said. “There are a lot of frictional costs in issuing catastrophe bonds, and some of these are fixed costs and not necessarily stable. So, for a smaller issuance, the efficiency of the instrument can be compromised by some of the fixed costs, and if the local regime can subsidise some of those costs, it does help very much. Reynolds concluded: “For the regime itself, they shouldn’t just use this as a subsidy, it can be used as a lever to develop local infrastructure. So, something Hong Kong and Singapore have done very well here is to stipulate a million on spend on local service providers, and that can certainly be used to encourage investment in the infrastructure in the new domicile.”