GIC Re: ‘Results show we are sailing in the right direction’

The strategy for the last couple of years has been to look at the bottomline because the top line was fine. Our investments were bailing us out all these years but that is not sustainable. Our shareholders were also demanding at every quarterly meet that we should start making a profit in operations. So we decided to turn the ship around and make it totally bottomline-focused. Steadily, over the last three years, our incurred claim ratios have come down. We have set a goal for achieving a combined ratio that’s below 100. That’s taking a bit of time. But the results are clearly indicative that we are sailing in the right direction. 

No underwriter in GIC is writing business that it feels will lead to a loss. Now, when we look at a proposal, we see if we have the means of making it profitable, or making the cedant share a bit of the burden. Because, if there is skin in the game from his end as well, then he will also take all precautions to ensure that the portfolio turns out to be healthy.

Health, actually, is more of a retail portfolio; it doesn’t require too much reinsurance. But health insurance has been the biggest gainer in the pandemic, with more awareness and sales. In life insurance, all of us have been hit badly, including GIC. Our combined has hit the roof but we are looking at a payback of two to two-and-a-half years. The rates have jumped up so much. Life is something that we will grow steadily and slowly but surely, because it gives us the balancing factor. 

We cannot say the pandemic is gone.  We are maintaining the checks we had brought in. Life insurance is a very demanding portfolio because it also demands a lot of solvency for life. We ensure that there are health checks, we try to identify the group, make sure there is no adverse selection. Lots of  data is being crunched, and we also put apprentices there. We will try and diversify it. We don’t want to be an Indian life reinsurer only. We want to go around the globe. Diversification is important for life.

I’m happy with the way it’s progressing because it’s not only premium that we look at from the syndicate. We are on the high table. The presence is very important. Second, it is giving us a lot of intellectual capital that already rests with Lloyd. That again is long-term. The new products we are planning are being assisted by Lloyd’s because they have the expertise. 

We are working on cyber products for the retail market. They should be out in another couple of months. We are also working on a lot of other small-ticket products for the retail market. 

We have increased rates in almost all segments. We have also worked on conditions and wordings. That’s why we are expecting a much healthier portfolio and, therefore, a healthier GIC going forward. Rates would have increased by 7-10 per cent in most segments. 

Our total exposure to Ukraine or the premium from there is less than $I million. It is nothing to worry about. The second part, which is more important for us, is the subsidiary in Russia, which is 100 per cent owned by us. We are right now in a pause mode. We’ll obviously be meeting all our obligations there, as we have a commitment to the market. And we are looking at ways to continue our operations there. 

The global business has not been very heartwarming because, in the last four to five years, there have been a record number of catastrophic events. But, on the flip side, the rates have hardened. We don’t want to let go of that. The international business is 35 per cent of our book right now. We would want to get it back to 60:40 in the short term and, of course, 50:50 in the long run. The spread is very important for our business. We would definitely want to have as much spread as possible and not be an Indian reinsurer only. It makes our portfolio very volatile. And we also have international standing only when we are writing across the globe.