How GIC's ownership problem is keeping insurance biz from growing up

Government shareholding and preferential regulation have skewed the reinsurer's efficiency and, by extension, that of the non-life insurance industry's too

Like the rest of the insurance industry, General Insurance Corporation of India, or GIC Re, had a diffic­ult FY21. At the worst of the tro­ugh in the first quarter of FY21, the solvency ratio, a key indicator showing how far as­sets cover commitments to fut­ure payments, went down to 1.52 in June 2020, just above the in­s­urance regulator’s man­d­ated 1.5. That is not the primary pro­blem with GIC Re. As the wic­ket-keeper for the Ind­ian insur­a­nce companies, the larger in­­d­­ustry still seems to be comf­o­rtable to see India’s sole re­in­surer play with a net behind it.

The net is the