India’s sole reinsurer, government-owned General Insurance Corporation of India (GIC), posted a profit after tax of Rs 2,345 crore for 2012-13, as compared to a loss of Rs 2,469 crore for 2011-12.
A K Roy, chairman and managing director, said the reinsurer was planning to become a part of the global specialist insurance market, Lloyd’s, in the quickest time possible.
GIC would need additional capital to do so and Roy said they’d use their own resources for this.
Lloyd’s is not a company but a market where members join as syndicates to insure risks. It serves as a market place where multiple financial backers or members come together to pool and spread risk.
“Once an entity has presence in Lloyd’s, they get an instant ‘A’ rating, a major advantage. Further, at a time when even the European Union is postponing the implementation of Solvency II from 2015 to 2016, Lloyd’s is already Solvency II-compliant. Hence, it is an excellent platform to do international business and we are studying the different mechanisms through which we can enter it,” said Roy.
GIC has proposed a dividend of 109 per cent, amounting to Rs 469 crore, for 2012-13. It wrote a gross global premium of Rs 15,086 crore, a growth of 10.8 per cent over the previous year. Total investments as on March 31 were Rs 26,132 crore; in the previous year, it was Rs 22,165 crore. The solvency margin (the amount of money an insurance company has in relations to probable claims) was at a ratio of 2.39.
The income from investments during the year was Rs 2,887 crore and assets rose to Rs 59,940 crore. “We have posted healthy profits as there were no major catastrophic events in the financial year.
This year, apart from looking at increasing our presence internationally, life insurance is going to be an area of growth,” said Roy. GIC is ranked 15th among international reinsurers by Standard & Poor’s; Roy said he wished to become one of the top five in terms of premium volume.
GIC is now planning to make forays into major international markets. They are looking at strategic alignments in South Africa, upgradation of status in Brazil and enhanced presence in South Asia. In Bhutan, it is in an advanced stage of establishing a joint venture, Bhutan GIC Re Ltd.
The reinsurer is involved in managing pools for terrorism, marine hull and the Indian motor third-party declined risk insurance pool. Further, it is the manager for the proposed Natural Catastrophe Pool (NCP) and is preparing to set up an Indian Nuclear Pool (INC). Roy said discussions were on between the insurance regulator, companies and state governments on the functioning of the NCP. As for the INC, it needs Rs 1,050 crore. Roy said while Rs 350 crore would be provided for, the rest of the capital had to be sourced. He said they were in discussion with stakeholders for a solution.
