Three priorities for the new GIC chief

The upgrade by Standard & Poor's does not in any way help the General Insurance Corporation of India's (GIC) global business plans.

"The international market's apathy towards Asian reinsurers and our rating being pegged with the sovereign rating affect our expansion plans," said R K Joshi, chairman-cum-managing director, GIC.

Having just taken over as CMD of the country's national reinsurer, Joshi said his three top priorities are to reorganise the manpower in order to derive maximum benefit, upgrade the software platform by going for a Rs 9 crore SAP project and develop latest products keeping pace with global market.

Joshi took charge on February 1, following the retirement of his successor, P C Ghosh.

Joshi has a global vision as GIC hopes to expand its operations overseas and increase its foreign inward business. Our current solvency margin of 4.36 enables us to expand our business four times considering the regulatory requirement of 150 per cent," said Joshi.

Today of GIC's total premium income, about 25 per cent comes from foreign inward business. Of this, over 30 per cent is from Asian countries, 23 per cent from the Middle East, 14 per cent each from Western Europe and Africa and 12 per cent from the Mediterranean, East Europe and CIS.

In fiscal 2004, foreign inward business premium income rose to $ 250 million from $ 214 million in the preceding fiscal.

Aside from expanding further in Afro-Asian countries, GIC is trying to extend its reach in Mediterranean countries, and in East European nations, which have just joined the European Union (EU).

GIC also proposes to enter CIS countries through its Moscow office. "We are trying to pitch for business from these countries but are facing competition from the London market as well as European reinsurance companies," he added.

On the domestic front, GIC has seen its business double in the last four years following the opening up of the insurance sector. Of the 85 per cent of domestic premium income retained in the country, GIC has a market share of 27 per cent.

This is partly on account of the 20 per cent compulsory cession, whereby domestic insurance companies have to give GIC 20 per cent of the reinsurance business before venturing outside.