The Hindu Business Line : GIC signs pact with Hannover Re

GIC Re and Hannover Re will jointly market and service the life reinsurance business in India. The agreement is for a minimum period of five years and will involve sharing of new business underwritten by both the parties in India.

Mr Yogesh Lohiya, Chairman and Managing Director, General Insurance Corporation of India, said that the for the first three years, the ratio of the revenue sharing arrangement between GIC and Hannover Re would be 60:40. In the next two years, the ratio will even out to 50:50.

Hannover Re is the fifth largest global reinsurance company in the world. It will provide technical knowledge and training to GIC’s staff . The domestic reinsurer will, in turn, offer inputs on the Indian market to Hannover Re.

GIC set up its life reinsurance department in 2002 and began operations in 2003. However, most global reinsurers like Swiss Re, Munich Re and RGA had already established their presence at the time and GIC has not able to make inroads in this segment. GIC’s reinsurance premium outgo from the life insurance market in the country was around 200 crore for the year 2006-07.

“Reinsurance business is dominated by non-life business. However, each reinsurer looks forward to having some portion of life and health business in its portfolio. GIC Re and Hannover Re are no exception,” said Mr Lohiya.

“Life reinsurance is currently concentrated in the hands of few reinsurers who have developed the necessary skills, techniques and support systems required for the business,” he added.

In Asia, Hannover Re currently has branches in Kuala Lumpur, Shanghai and Seoul.

Dr Rudiger Mehl, Managing Director, Hannover Life Re International, said that the Asia Pacific region accounted for 8 per cent of the company’s total revenues from the life and health reinsurance business.

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