The Hindu Business Line : GIC inks pact with Japanese body

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Mumbai March 7 The General Insurance Council (GIC) has signed an MoU with the General Insurance Association of Japan (GIAJ) to share expertise in the non-life sector.

Mr K.N. Bhandari, Secretary-General of the GIC said that the mitigation of national catastrophes would be a key area where the GIAJ would be consulted. "We can learn from their pre- as well as post-disaster management systems," he said.

Mr Katsuo Matsushita, General Manager of GIAJ, said that Japan has a `natural catastrophe pool', which insures residential houses and the third party risks of vehicles.

In the case of the pool for houses, the Government would step in if the losses exceed capacity. A `pool' is a fund created out of the commitments from insurance companies based on their individual exposures.

For claims, the pool reserves could help make payouts. The Indian non-life industry has been toying with the concept but concrete steps are yet to be taken.

"The Indian sub-continent is vulnerable to cyclones, floods, hurricanes and earthquakes. We have to create national capacity to manage losses so that we are not dependent on overseas reinsurers," said Mr Bhandari.

He added that non-life insurers would meet in a few weeks to operationalise the concept. Currently, there is a terrorism pool with a capacity of Rs 1,000 crore. The motor insurance pool was been put in place on January 1.

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