Swiss Re wants to enter India, and GIC wants to venture out

Venkatachari Jagannathan
25 November 2002

Chennai: With the primary insurers getting into India, it is now the turn of foreign re-insurers to start lobbying to gain a foothold here. Starting the sales pitch is Swiss Re.

According to its study, the presence of foreign re-insurers will result in higher retention of reinsurance premium and stability in domestic insurance industry, as any adverse overseas developments affecting the re-insurers will not impact the Indian insurers.

Post-9/11, global re-insurers are in a bind. While the loss ratio has gone up, the downward trend in the equity markets affected their investment income. For instance, Swiss Re’s net income for the first half of 2002 came down to CHF 118 million from CHF 1 345 million the previous year corresponding period.

Presently General Insurance Corporation of India (GIC) is the only national re-insurer. The company gets 20 per cent compulsory re-insurance cessions from the domestic general insurers. The national re-insurer is considering a name change to GIC-Re.

The company is also getting its act together now. GIC is now drawing a catastrophe map of India (Cat Map) to identify the areas that are prone to various risks — flood, earthquake and the like. This will help in quoting its reinsurance rates.

With the global reinsurance market in a churn and many insurer’s spinning off their reinsurance operations into a separate outfit, GIC wants to cash on the opportunity that is available now.

The company is in talks with many reinsurance brokers to bag big policies that are due to come up for renewals. The company is also infusing life into its London office and looking at business opportunities in the SAARC region and the Middle East.