Greetings from India GIC Re, the Indian Reinsurer, on its path to be - - PowerPoint PPT Presentation

Greetings from India

GIC Re, the Indian Reinsurer, on its path to be a leading global reinsurer

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World Bank

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World Economic Forum 2008–2018, Global Risks Reports

“a sound national insurance and reinsurance market is an essential characteristic of economic growth.”

UNCTAD, 1964

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E & Y

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Global Reinsurance Highlights 2018 Global Reinsurance Highlights 2018 Global Reinsurance Highlights 2018

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Statistica.com Agriculture 18 Industry 24 Services 58

10 20 40 60 80 2013-14 2014-15 2015-16 2016-17 52,34 52,64 55,45 64,49 Gross Written Premium (US$ billion) 5 10 15 20 25 30 2014-15 2015-16 2016-17 2017-18 18,19 20,94 27,03 29,791 Gross Written premium (US$ billion) Total First Year

11 5 10 15 20 25 2014-15 2015-16 2016-17 2017-18

12,42 14,54 19,69 24,069

Gross Written Premium (US$ billion)

12 10 20 30 40 50 60 70 Private Sector Public Sector 9,114 20,676 18,1 10,99 30,6 69,4 % Market Share % Growth Gross Written Premium (US$ billion) 5 10 15 20 25 30 35 40 45 50 Public Sector Private Sector Standalone Health Insurers Specialised Insurers 10,437 10,054 1,274 1,392 13 21,6 41,6 8,78 45,07 43,41 5,5 6,01 Market Share % Growth Gross Written Premium (US$ billion)

13 State induced schemes- Crop, Health Infrastructure Growth Growing Middle Class Innovative Products New distribution channels Disinvestment Hike in FDI limit On line Sales Web Aggregators Enabling regulation Financial Inclusion

1818 – 1956 + 1972 1973 - 2000 2000 - 2018 Private and Foreign participation Government ownership and control Private and Foreign participation

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1973 - 2000 THE GENERAL INSURANCE BUSINESS (NATIONALISATION) ACT, 1972 ACT NO. 57 OF 1972 [ 20th September, 1972]

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1973 - 2000

Reinsurance skill set development Assets/ Investments Global relations Loss Prevention Association National Insurance Academy Credit Rating Insurance Institute of India Pools Association of Insurers and Reinsurers of Developing Countries Federation of Afro Asian Insurers and Reinsurers Strong balance sheet College of Insurance Managing Compulsory Cessions

17 With the matrix of general insurance business set for major changes after January 1, 2007, and companies being allowed to fix their own prices in fire, engineering and motor insurance, the 20% compulsory cession to GIC Re may ultimately go, although in phases. “It is possible that compulsory cession may ultimately go. Actually, compulsory cession is one of the key tools in the hands of the regulator to optimise retention within the

• country. They also create an automatic

capacity which is useful for the Indian companies,” a senior GIC official said. The national reinsurer is already preparing ground to reduce the dependence on its compulsory or obligatory premium, which contributes 82% of the domestic reinsurance premium at present. It is likely to explore a larger pie in the international business and also seek strategic

• pportunities abroad.

I can only say that the phaseout of obligatory cessions would have some impact on GIC Re, but I will not give it much significance. GIC Re is now competing for business on the basis of price, service and expertise. We have diversified

• ur area of operation by accepting new lines

such as life reinsurance, off-shore energy and liability business. Risk management and assessment capabilities are being enhanced to provide value-added services to clients. We are now concentrating on increasing our international portfolio. In the various conferences and fairs that I have attended, I have noticed that insurers in the developing world hold GIC Re in high regard. These insurers have also tried out some of the large global players and have seen how they have responded after a bad year. We thought if that is the case why not encash that feeling that insurance companies have.

2000 - 2018

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Life Insurers 24 Companies Non-life Insurers 33 Companies Specialised Insurers 6- Health, 1 Agriculture, 1 Credit Reinsurers 2 Companies Branches of Reinsurers 10 Branches (including Lloyd’s) Agents Numerous Individual and Corporate Agents Brokers 433 Brokers (Direct, Composite, Reinsurance) TPAs 27 TPAs Web Aggregators 26 Web Aggregators Insurance Repositories 4 Insurance Repositories Insurance Associations

Life Insurance Council and General Insurance Council

2000 - 2018

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The primary legislation regulating the Indian insurance sector: The Insurance Act 1938 (Insurance Act) and The Insurance Regulatory and Development Authority Act 1999 (IRDA Act). The IRDAI issues various regulations for governing the licensing, registration and functioning of insurers, reinsurers and insurance intermediaries. The IRDAI govern a wide range of aspects, including: # Registration of Indian insurance companies, # The assets and solvency margins required to be maintained by insurers, # Manner of preparation of financial statements, # Issuance of capital, # Registration requirements and corporate governance norms for entities operating in the insurance sector, # the permissible foreign investment limits, # minimum capitalisation requirements, # minimum qualification requirements of directors/ principal officers, # Separate sets of regulations governing reinsurance arrangements of general insurers and life reinsurers, including the manner by which cross-border reinsurers (those reinsurers who do not have a physical presence in India) can reinsure risks written by Indian insurance/reinsurance companies.

2000 - 2018

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The overarching regulatory framework for the reinsurance of general insurance risks is laid down by the IRDAI (General Insurance-Reinsurance) Regulations 2016 (Reinsurance Regulations). The guiding principle is maximising retention within India, so each insurer must maintain the maximum possible retention commensurate with its financial strength and volume of business. Insurers must comply with various requirements provided by the Reinsurance Regulations, including filing of the reinsurance programme. Placement of reinsurance by Indian insurers is subject to the prescribed order of preference, which provides the hierarchy between the various entities with which an Indian insurer can place its reinsurance business. At present, the General Insurance Corporation of India has the right of first offer over any entity to which an Indian insurer can offer its reinsurance business.

2000 - 2018

• Owned by Government of India, formed by an Act of the Indian Parliament and

incorporated under Indian Companies Act

• Was reinsurer as also holding company for four Public Sector General Insurance

Companies till 2000

• Currently engaged exclusively in reinsurance business
• Global reinsurer for General and Life insurance business
• Provides reinsurance solutions for Indian insurers and emerging markets
• Offers adequate capacity, automatic and optional to direct insurers
• Supports various agricultural insurance schemes including weather based covers
• Manages pools:
• Indian Terrorism Pool
• Marine Hull Pool
• India Nuclear Insurance Pool
• FAIR Nat Cat Pool

• Secure grade credit rating
• Very strong capitalization
• Large capacities offered
• Multi locational office network
• Global spread of risks
• Strong IT and ERM framework
• Robust and dynamic risk

governance structure

• Well defined Business Continuity Plan

in place

Branches

• Dubai
• London
• Kuala Lumpur

Representative Office

• Moscow

Joint Venture GIC Bhutan Re Limited Wholly owned Subsidiary GIC Re South Africa Limited

1972 2018 

Trained and dedicated manpower

• Induction of fresh specialist talent
• Low Management Expenses
• Debt Free Organization
• Robust investment income
• Best global practices in the area
• f Corporate Governance
• Comfortable Solvency Margin
• Socially Responsible

Lloyd’s Corporate Member GIC Syndicate 1947

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Key Financial Information and Performance Indicators For the year ended on March 31st 2018 (US $ Mln) YoY Growth Gross Premium 6423 24 Net Worth 7892 6.64 Total Assets 16938 16 Income From Investment 588 24.81 Profit Before Tax 563 0.75 Profit After Tax 496 2.8 Combined Ratio 104 Net Commission Ratio 16.9 Operating Profit Ratio 6.2 Solvency Ratio 1.7

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47591 59283 66838 77833 90266 99260 76855 92408 109686 130016 148300 179466 215259 50000 100000 150000 200000 250000 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Net Worth

25 190 215 430 1075 2150 4300 4300 4300 4386 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 1973-81 1982 1986 1990-91 1993-94 2005-06 2014-15 2015-16 2016-17 2017-18

Capital

INR Mln. INR Mln.

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35 22 16 23 16 14 15 15 17 18 18 12 10

5 10 15 20 25 30 35 40 2004 2006 2008 2010 2012 2014 2016 2018

Global Rank

50 80 212 240 291 402 946 1120 2085 2321 2422 2534 2211 2216 2473 4674 5796 1000 2000 3000 4000 5000 6000 7000 1975 1980 1985 1990 1995 2000 2003 2005 2007 2010 2011 2012 2013 2014 2015 2016 2017

NWRP

USD Mln.

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Government-owned reinsurance company, GIC Re, has secured 10th position amongst the top 40 global reinsurers in a recent ranking published by Standard and Poor's. The ranking was given on the basis of premium booked during FY18, the company said in a release. In FY18, the company registered a top line growth of 24.5 per cent, recording premium of Rs 41,799 crore.

September 12, 2018

GIC Re enters league of top 10 Global Reinsurers With the Indian economy acting as a driver of global growth among emerging

• nes, GIC Re can be

expected to further enhance its position globally.

September 12, 2018

While retaining a robust market share in its home of India, GIC Re is increasingly competing on the international stage.

10-09-2018

Aiming High Alice Vaidyan has set the foundation for a bigger play for GIC Re in both domestic and global market. "GIC had a market share

• f more than 65 per cent

in 2017/18," says AliceVaidyan, CMD, GIC Re, who has successfully taken the company

• public. During her

tenure, GIC Re has grown its premium from Rs18,436 crore. The aim is to touch the Rs 50,000 crore mark this year. “The Lloyd’s entryprovides us an

• pportunity to access

business from a globally reputed platform and enjoy better credit rating," says Vaidyan.

Global al Footprin rint t : Offices ices London, Dubai, Kuala Lumpur Johannesburg, Moscow Allian iances ces Singapore, Thailand, Kenya, Tanzania, Bhutan Cooperatio ation MoUs Myanmar, Indonesia Reinsurance surance Solutio tions: s: India & SAARC markets Data a Analyt lytics cs: India & SAARC markets Train aining/ / Skillse lset t Develo lopment: t: India, SAARC, ASEAN markets IT and Tools: s: Modeling, Specific Research Global al Asso sociat ciation: FAIR, AIRDC, SAARC, BRICS Pools: s: Local, International Relatio ationship ship Buildi ding: : MoUs Players, Regulators- SAARC, ASEAN, LATAM Upscal scalin ing: Lloyd’s, UK, USA, Canada, EU

Deepak Godbole

Moscow, 20 September 2018