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| Edited By: Manju AB |Source: DNA |Updated: Mar 20, 2018, 02:27 AM IST
GIC Re manages the proposed India Nuclear Insurance Pool. What is the status?
We are on the verge of launching the India nuclear insurance pool. It is work in progress right now. But we will be launching it this calendar year. We have collected about Rs 900 crore and for the balance we are tying it up. We are expecting the government also to put in some resources. Under the Nuclear Civil Liability for Nuclear Damage Act 2010, the capacity of the liability pool would be Rs 1500 crore. About 7 private insurance companies have already contributed and we expect some more private players to contribute.
How will things change for GIC Re now that the insurance sector is opening up?
There is no rush from foreign reinsurance companies to set up offices in the country. We will have to assess the interest of the reinsurers. All of them are waiting for the regulations to be out before they set up shop in the country. No one has conveyed decisively that they would like to come to India. In any case competition is always good and we will gear ourselves to meet the competition. A number of reinsurance companies are already in the country operating through brokers so we need to see if they are comfortable to continue like that or if they will want to be physically present in the country. Repatriation of capital, what sort of restrictions will be there will be closely watched before they come in. They will assess as to how much of capital they need to keep here. We believe in free play. Reinsurance is a global business and we are doing business across the globe.
How is your global business doing?
Of the total premium collected about 46% of the premiums come from overseas markets. We do global reinsurance. Reinsurance is transferring risk in smaller proportion to larger number of players. Chunk of the overseas business comes from UAE, Singapore, Malaysia, Africa and some European counties. Global business is going well and we will expand further.
The underwriting losses have jumped from Rs 3706 million in 2012-13 to Rs 8872 million in 2013-14. Why has this happened?
The claims from the Uttarakhand flood came in, crashes from the Malaysian airlines have also contributed to the losses and there were some other losses from other global markets.
Out of the Rs 146801 million gross premium collected the underwriting loss has been Rs 8872 crore during 2013-14? So, the core insurance business is not profitable. Is the investment income of Rs 34835 million during 2013-14 keeping the company profitable?
The pricing in India is not right. Pricing needs to be corrected. Reinsurance business depends on two factors, taking risk and investing the money that we collect as premium either in the equity markets or in the debt market till we make the claim payment. So the investment profits pertains to the core business. We are actually making operating profits. On the investment income we have increased our returns to Rs 34835 million from Rs 28978 million. You cannot segregate investment income and business income into watertight compartments.
With all this competition at your door step, where do you envision the company being in five years?
GIC Re had some time back drawn up a Vision 2025 plan that envisages us to be among the top 5 global reinsurers by 2025. Today we are at the 15th position globally as per A M Best global Rankings for Non-life reinsurers for 2014. Now we are focusing our expansion strategy to achieve that vision target. In the last couple of years we have grown both organically and inorganically. Today, we are virtually present in all continents of the globe with the exception of North America, where we expect to be present soon. Up gradation of our Eventual Reinsurer status in Brazil to Admitted Reinsurer status and establishing a representative office there; and upgrading the representative office in Moscow into a branch are also on the drawing board.
