State run reinsurer General Insurance Corporation of India (GIC) is planning to convert its office in GIFT City to a subsidiary, making it a reporting hub for international business and also carry out direct insurance business from there in foreign territories.

“GIFT City gives us the advantage of doing direct insurance as well. We will possibly look at upscaling our GIFT City branch to a subsidiary and then putting our entire foreign operations on to GIFT City,” said Devesh Srivastava, Chairman and Managing Director, GIC Re.

If GIFT City becomes a subsidiary, it can take care of foreign operations with other foreign branches and subsidiaries reporting to it. The Mumbai headquarters of GIC would then take care of the domestic reinsurance business.

Such a move would have several advantages including tax benefits, Srivastava said. It would also enable GIC Re to do both direct and reinsurance business from there.

GIC Re is already undertaking direct insurance business in aviation globally and is doing a bit of it from its GIFT City branch. Srivastava said there is a lot of potential for direct insurance in oil and energy but the insurer is yet to start it.

Direct insurance can only be undertaken in certain countries where regulations do not require an insured party to first go to an insurer. For Indian business, GIC Re would continue to operate as a reinsurer.

“As a subsidiary (in GIFT City), it will be much easier to develop our business, he further said.

While GIC Re has already initiated the process to shift the operations, Srivastava said it may be difficult to give an exact timeline. It could take two to three years, he added.

He also said the reinsurer will continue to have a footprint in various countries it operates now but the reporting will be at the GIFT City.

GIC Re had in July last year shut down its Dubai office as its license was not renewed and has moved business from there to GIFT City.

Srivastava said a large part of the Dubai business is now being written out of the GIFT City office.

“In renewals, there have been cases where people have preferred not to come to Gift city. We will keep the company in Dubai for one more year, perhaps,” he said.

The reinsurer had in 2017 opened its office in GIFT City.

GIC Re reported a 42.4 per cent growth in its net profit for the quarter ended March 31, 2022 to ₹1,795.4 crore against ₹1,260.44 crore in the same period last fiscal with growth in gross premium and underwriting profit.

For the full fiscal 2021-22, it had a net profit of ₹2,005.74 crore, 4.4 per cent higher than the net profit of ₹1,920.4 crore in 2020-21.

The board declared an interim dividend of ₹2.25 per equity share.