Reaching for the top 10

As GIC Re aims to be a top 10 reinsurer globally, chairman-cum-managing director Alice Vaidyan describes the company’s growth plans to Monte Carlo Today.

In which geographies is GIC Re looking to grow?

Asia and Africa have been our traditional markets. We have grown in these markets via mergers and acquisitions (GIC Re SA in South Africa), joint ventures (GIC Re Bhutan) and by organic growth.

We are now looking to expand our footprint further in Asia including in China and Myanmar to begin with. We are also likely to upgrade our presence in Russia from a representative office to either a branch or a 100 percent-owned subsidiary. Plans are also afoot to upgrade our status to Admitted Reinsurer in Brazil.

The US and Canada were not our original focus but now we are prudently writing in these markets. Thus we are now growing in virtually in all geographies either organically or inorganically.

How will you protect your market share in India?

It’s a misconception that competition in the Indian reinsurance space is something new. We have around a 50 percent share of the reinsurance premium in the country and we expect to maintain this figure.

We have grown with this market. As the sole Indian reinsurer for over 45 years now are well placed to capitalise as the domestic market opens up and grows.

The entry of foreign reinsurers will benefit the Indian market in terms of capacity, newer products, price realignment and an infusion of talent and skills. There is ample space for everyone to grow and the long-term picture is optimistic.

You wish to be a top 10 reinsurer globally. How will you achieve this?

The plateau growth in the developed markets and slowing of growth in the emerging markets will make this a challenge but we are geared up for this.

We are focusing on newer classes of business such as agriculture, life, liability and cyber. We are now one of the largest agricultural reinsurers globally. We are scaling up our operations in life reinsurance as well.

The slowdown in the emerging markets is also an opportunity for prudent M&A activity, so we are confident of maintaining a healthy top-line and bottom-line growth to grow and move in to the top 10 club.

Are you writing new risks such as cyber and terrorism?

We are focused on newer lines and cyber and terrorism are a part of that. Our liability class of business grew at 30 percent during 2015/16.

We are also concentrating on underwriting profitability. Focusing on our client relationships to emerge as a market-friendly reinsurer is another area of priority for us.

Is climate change on your radar as a challenge?

Climate change is a major challenge facing India. With planned urban development not keeping pace with the rising demand, ad hoc growth has resulted in people living in high-risk zones. With time, the Indian risk insurance landscape will only become more complex. We as the insurance industry need to adapt.

The industries and organisations that contribute to climate change are the ones that are highly insured. Our industry covers many of those industries that add to either global warming or pollution.

This has to change and we need to factor the effects of climate change in our business plans.

GIC Re has been looking at catastrophe bonds for disaster financing. We have also floated the idea of a basic cover for every citizen against natural catastrophes.

How are you helping tackle the protection gap?

The government of India has launched several universal insurance policies and simple social security schemes. These have created a system that works on the principle that India needs insurance; Indian people need insurance; and we need to provide this in the most acceptable form.

The success of these simple social insurance schemes should spur innovative solutions to bridge the ‘gap’. GIC Re is providing much support to such universal social insurance schemes.

What will be the main talking points in Monte Carlo?

The agenda will largely involve the forthcoming January renewals and the trends that we are likely to witness. Talks will also centre around the catastrophes that have affected the market, insurance-linked securities, the bond markets and Brexit. M&A will certainly be another point of discussion.

What is your main objective in Monte Carlo?

GIC Re has been participating in the Rendez-Vous for over a decade. It is also a great place to meet your associates and exchange views with new contacts. With so much happening in the market today, it has become the place where ideas are given shape and taken to the next level. GIC Re always has a strong presence in Monte Carlo and this year will be no different.

Alice Vaidyan is the chairman-cum-managing director of GIC Re. She can be contacted at: cmd@gicofindia.com