Opportunities beyond home territory
The Indian market remains the core of GIC Re’s business and it is growing fast, but the reinsurer is increasingly capitalising on opportunities overseas as well, as Alice Vaidyan of GIC Re told Monte Carlo Today.
“Competition has always benefited any market and the Indian one is no exception to this rule.”
How would you characterise the overall health of the Indian reinsurance market?
The Indian non-life market is growing at a healthy 18 to 19 percent year-on-year and with the new government in place for the next five years, the thrust will be on infrastructure development over and above the increase of insurance coverage to the population by way of crop, health, accident and property cover. The reinsurance market will form an integral part of the value chain.
Where does GIC fit in terms of market share?
As the Indian reinsurer, GIC Re has a market share of over 60 percent. We continue to support the market in all its endeavours and have always been the preferred partners.
Has competition increased since more overseas companies were awarded licences?
We have always welcomed the foreign players in the market with the strong belief that the Indian market is big enough to offer everyone a slice of the pie. Competition has always benefited any market and the Indian one is no exception to this rule.
What affect has this had on pricing and terms and conditions?
The availability of capacity has had a detrimental effect on pricing. Given our position in the Indian market, GIC Re took a bold stand of effecting price correction recently in some named occupancies. This was received well by the market and we hope the situation will improve, going forward.
Do you anticipate growth in this market? In which lines?
As already stated, the market is itself in a high growth phase and the reinsurers will also benefit from it. Retail will be the big driver as the market is severely underpenetrated and leaves a lot to be desired.
What are the biggest challenges you face?
As the global reinsurance industry digests the record losses of 2017 and 2018, reassesses the relationship of climate change with changes in catastrophe behaviour, and also settles down with integration of the alternative capital with traditional capital, the industry will seek a new mid-term equilibrium.
We at GIC Re are reassessing our stance in terms of risk appetite and management in this scenario of moving parts.
How does the size of the domestic book compare with your international business?
We currently have a 70:30 divide and hope to achieve 50:50 as our corporate objective in future.
What opportunities for growth do you see overseas?
We have been an acknowledged brand in the Afro-Asian market for over three decades now. We have to strengthen our footprint in the Americas (both North and South) as also the EU and CIS and FSU countries.
What would you say is your biggest advantage when competing internationally?
We are a relationship-based company and have had a longstanding association with our cedants. This has been acknowledged by the market who value the long-term perspective that GIC Re brings to the table.
Alice Vaidyan is the chairman-cum-managing director of GIC Re. She can be contacted at: cmd@gicofindia.com
