The Hindu Business Line : GIC to upgrade offices in London, Dubai

The board of GIC has taken a decision to this effect and the corporation will shortly apply for licences in these countries. This means that the corporation would be able to underwrite business based on the regulations in the UK and the United Arab Emirates (UAE). A senior GIC official said the corporation currently has only representative offices in these countries.

"With the branch licence, the company would be able to leverage these branches to tap business from emerging markets in Eastern Europe, West Asia and East Africa. We are looking for a strategic merger or acquisition that will help us increase our international business," said the official. Post-hurricane Katrina, there have been reports about an imminent hike in reinsurance rates.

However, this will be apparent only in January when reinsurance proposals will be up for renewal.

For GIC, this could be the right time to enter the international market in a big way, as fresh capital would be the need of the hour. GIC's overseas business clocked Rs 1,167 crore or $267 million in 2004-05. This accounted for 25 per cent of GIC's total net premium of Rs 4613.87 crore.The company is targeting business worth $500 million from its foreign business in two years.

Currently, GIC has business-sourcing centres in London, Dubai and Moscow. But all the business proposals have to be underwritten in India. Asia (29 per cent), West Asia (23 per cent) and the Mediterranean and Eastern Europe (17 per cent) account for the major chunk of GIC's foreign business.

This is followed by Africa (14 per cent), Europe — excluding the UK (9 per cent), the UK (5 per cent) and the Caribbean (2 per cent). GIC, however, has a clear picture of the countries it will not accept business from.

Of these, the US, Canada, Latin America, Japan, New Zealand and Australia are prominent on the list. It will focus on the property business.

The company has, in fact, undertaken a technological upgradation exercise to compete with giants like Munich Re and Swiss Re.

The Indian reinsurer has implemented an integrated software product that will enable it to transact business online. GIC is at present ranked 34 among global reinsurance companies on the basis of net written premium.

The company has set itself a target of breaking into the top 20 by 2007.

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