General Insurance Corporation of India (GIC Re) Chairman and Managing Director A K Roy said on Monday that the reinsurer is planning to become a part of specialist insurance market Lloyd’s at the earliest.
Though the company will need additional capital to be a part of Lloyd’s, Roy maintained they would use their resources to further this process. To the uninitiated, Lloyd's is not a company, but a market where members join together as syndicates to insure themselves against risks -- multiple financial backers or members come together to pool and spread risk.
"Once an entity has a presence in Lloyd's, they get an instant 'A' rating, which is a major advantage," Roy said. He said that at a time when even the European Union is postponing the implementation of Solvency II from 2015 to 2016, Lloyd's is already Solvency II compliant. "So, it is an excellent platform to do international business and we are studying the different mechanisms through which we can enter it," Roy added.
The country’s only reinsurer GIC Re posted net profit after tax of Rs 2,345 crore for financial year 2012-13 as against loss of Rs 2,469 crore in 2011-12.
Meanwhile, GIC Re has proposed a dividend of 109 per cent amounting to Rs 469 crore for the year 2012-13. During this period, it wrote a gross global premium of Rs 15,086 crore registering 10.8 per cent growth over the previous year.
The total investment base of GIC Re as on March 31, 2013 stood at Rs 26,132 crore as compared with Rs 22,165 crore in the previous year, while the solvency margin stood at 2.39 per cent. Income from investments during the year was Rs 2,887 crore and their assets rose to Rs 59,940 crore during 2012-13. "We have posted healthy profits as there were no major catastrophic events during the fiscal. This year, apart from increasing our presence internationally, life insurance is going to be an area of further growth," Roy said.
While GIC Re is ranked 15th among international reinsurers by S&P, Roy added that they wished to become one of the top five players in terms of premium volume.
GIC Re is now planning to make forays into major international markets. They are looking at strategic alignments in South Africa, Brazil and enhanced presence in the SAARC countries. In Bhutan, the company is in advanced stages of establishing a JV company ‘Bhutan GIC Re Limited'.
