More growth ahead: GIC Re chairman
Indian reinsurer GIC Re is preparing to launch an IPO. Chairman-cum-managing director Alice G Vaidyan explains the reasons behind it and the company’s plans for the months ahead to Monte Carlo Today.
You are preparing to launch an IPO. What is the strategy and rationale behind this?
Our IPO will definitely bring in more visibility, transparency and accountability to our functioning and will lead to improved corporate governance and risk management. I think listing allows the shareholders to unlock value and also gives the opportunity to companies to have more funds available to meet future expansion plans. GIC Re has already filed its preliminary prospectus with the market regulator the Securities and Exchange Board of India (SEBI) and is awaiting final approval. We have simultaneously commenced preliminary deliberations with domestic and international investors.
How might this change your approach and strategic direction?
According to SEBI regulations, it is mandatory to have a minimum of 25 percent floating stock in the market over a three-year period and hence, the change will be evolutionary. With the addition of public and institutional shareholders to the ecosystem of our stakeholders, there will be greater interaction with the investment community. This will concomitantly lead to greater transparency and benchmarking of GIC Re’s performance. We will have more freedom, going forward, to raise capital in order to fund our growth objectives.
If so, how do you plan to seek growth in a soft market?Our main thrust is towards diversification across product lines and geographies—segments such as agriculture, cyber, liability, and life will definitely see our greater commitment. We would also be focusing on optimising and prioritising our client relationships—being seen as a market-friendly reinsurer.
In which new geographies or product lines is GIC Re now looking to grow?
Our growth plans include:
- Establishing a syndicate at Lloyd’s of London which will write a variety of classes of business from different parts of the world;
- Expanding our relationships with insurers in the US and accepting more US-related risks;
- Establishing representative offices in China;
- Establishing a representative office in Brazil to expand our Latin American business;
- Converting our Moscow representative office into a wholly owned subsidiary and expanding our reinsurance business in Russia and CIS countries from Moscow;
- Establishing a strategic relationship for reinsurance business in Myanmar;
- Establishing a representative office in Bangladesh.
We would continue with our focus on growth markets. In terms of product lines, we intend to grow our domestic health and liability business, and our overseas property, space and cybersecurity lines, besides life and agriculture business.
What do you believe will be the main talking points in Monte Carlo this year?
I believe continuing international soft market conditions and downward pressure on profitability of reinsurers will figure prominently in the main talking points. Severe-weather-related events and their impact will be another talking point. Whether their occurrence will lead to rate changes across other geographies and classes, and whether they will be confined to being earnings events as opposed to capital events are points of interest.
What is your main objective in Monte Carlo this year?
The Monte Carlo conference is one the world’s leading insurance and reinsurance-related conferences. Our objectives are to keep in touch with all our business partners, exchange notes on the international market conditions and get a fix on risk perception from multiple perspectives.
Alice G Vaidyan is the chairman-cum-managing director of GIC Re. She can be contacted at: cmd@gicofindia.com
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