Want to make GIC Re among top 10 insurers globally, says CMD

State-owned re-insurer GIC Re is looking to double its business in the next three years, a top official said.

“The aim is to double the revenue from premiums to $5 billion from the present $2.5 billion, by expanding the reach to growing economies,” Alice G Vaidyan, Chairperson and Managing Director of GIC Re, said.

Insurance business has maximum potential in emerging economies, especially in BRICS nations, with a growth rate of 10-15 per cent vis-à-vis the saturated Western markets, where growth is less than 1 per cent, she told BusinessLine during an exclusive interaction. There would be greater focus on CIS and Latin America, she added.

Vaidyan, who was here for the Women Leadership Conclave organised by the Kerala Management Association, said that the company is looking at both organic and inorganic growth by acquisitions and overseas expansion.

It has already opened offices in London, Dubai, Malaysia, Moscow and South Africa and is in the process of setting up one in Brazil shortly. China and the US will be on the company’s radar in the next two years.

“Today, GIC Re is ranked 14{+t}{+h} internationally in insurance business and I want to take it among top 10. We have the inherent strength of a PSU, as a stable re-insurer, compared to private players,” Vaidyan added.

Asked how the company is gearing up to face competition from private players which are setting up offices in India, the CMD said: “I don’t see any serious threat. Instead, the market will witness best international practices, product innovation and penetration, which will lead to further growth.”

Maintaining that the company deserves the mandatory reservation of 5 per cent on all-Indian business, she said there is no harm in continuing with such restrictions for some more time. Earlier, the mandatory reservation was 20 per cent. However, such mandatory reservations are in place in countries like China, Indonesia and Malaysia.

In advanced countries, there are invisible barriers such as letters of credit, premium deposit withholding, tax withholding, etc.

On the nuclear liability pool, she said, the company is in the process of making the ₹1,500-crore pool operational shortly with a major share from GIC Re, covering NPCIL and Indian and foreign suppliers. Other such pools, such as for terrorism, marine hull and third-party motor are working very well, Vaidyan added.

On the company’s preparedness for a possible IPO based on the Finance Minister’s Budget speech, she said, GIC Re would be seriously taking up the challenge by becoming the first insurance company to be listed.

“We feel that listing will bring in a lot of transparency in operations, good governance and visibility in the market,” she said, adding that further steps in this regard would be based only on the government’s advice.

On the financial loss to the company on account of Chennai floods, Vaidyan said GIC Re’s loss was only to the tune of ₹1,000 crore against the insured market’s ₹4,000-5,000 crore. “We have our own protection and it does not affect our balance sheet,” she added.

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