GIC Re Global Reinsurance Solutions. - Mrs. Reena Bhatnagar

Transcription

1 GIC Re Global Reinsurance Solutions Aviation Insurance Market & Evolving regulatory landscape 01 - Mrs. Reena Bhatnagar

2 02 Investment in aviation helps to open a country s economy to global markets and opportunities. It can lead to an improvement in its long-term economic performance - Giovanni Bisignani - Director General & CEO, IATA

3 Passenger Growth Country Passengers (in Millions) 2014 Passengers (in Millions) : forecast for 2035 Growth % Bangladesh % India % Maldives % Nepal % Pakistan % Sri Lanka % Bangladesh India Maldives Nepal Pakistan Sri Lanka Passengers (in Millions) 2014 Passengers (in Millions) : forecast for 2035 Source: Intervistas Final Report on Asia Pacific Commercial Air Transport: Current and Future Economic Benefits 03

4 India to become the third largest air passenger market by IATA 04

5 Passenger Traffic carried by Scheduled carriers Passenger numbers in Millions Domestic International Total 05 Source: DGCA

6 Initiatives by the Government Airport building and modernization projects worth over US$ 3 billion with focus on improvement in regional air connectivity. Construction of 18 Greenfield airports approved at an estimated investment of US$ 4.66 billion. The Ministry of Civil Aviation along with Airports Authority of India (AAI) plans to develop small airports with frugal facilities and encourage private airlines to bid for routes connecting these small airports with existing larger airports, thereby increasing regional air traffic. AAI plans to expand capacity at 12 airports to accommodate rising air traffic. 06

7 07 UDAN Regional Connectivity Scheme to make air travel affordable and widespread and enable common citizens to fly New Regional flight routes to connect underserved and unserved airports In April, 2017, 5 Airlines awarded 128 routes to 70 airports To include seaplanes and rotor wing aircraft / routes in the Scheme Fare cap of INR 2,500 (USD 38) per hour of flight for 50% of the seats (Min 9 / Max 40). Remaining seats to be priced at market price. Fare cap to be graded based on distance. Value Gap Funding (VGF) to subsidize the airfare

8 Indian Non Life Insurance Industry April- March 2018 Gross Premium for Non-life industry (including specialized institutions) stood at INR 150,572 crore (INR 1505 Bn) {P.Y. INR 128,213 crore (INR 1282 Bn)} registering a growth of % for the Year ended (P.Y %) Private companies registered growth of 21.77%( P.Y. 35.4%), PSU Companies %(P.Y 25.2%), Standalone Health Insurers 41.66% (P.Y %) and Specialized Institutions 8.8% ( P.Y. 72.5%). (Source GI council) The above premium was contributed by 25 non-life companies (21 private and 4 PSU), 6 stand-alone health companies and 2 specialized insurers. Total 33 companies (P.Y. 32) (Source GI council) Aviation Premium for the year was at INR 421 Crore (INR 4210 Mn) 08 8

9 Reinsurance : Regulatory Framework Reinsurance Regulations IRDAI : Maximize retentions within the country Statutory Cessions 5% to GIC Re (No Limit / Cap for Aviation Class of Business) Order of Preference GIC has Right Of First Refusal (ROFR) 09

10 Reinsurance : Order of Preference Quote Stage Every Indian Insurer to obtain best terms (for facultative and treaty) from Indian reinsurer and from at least 3 Category I entities Follow Line Stage The Indian insurer to offer the best terms for participation in the following order of preference: (a) To the Indian re-insurer and thereafter to Category I entities. (b) To Category II entities. (c) To the branch offices of foreign reinsurers set up in SEZ (d) The balance to Indian Insurers and overseas reinsurers. 10

11 Aircraft Lease/Finance Agreements vs Indian (Reinsurance) Regulations Lease Agreement stipulate placing of the reinsurances in London / European Markets to the extent of 90% - 95% Indian Regulations provide for maximum retentions in the country, 5% statutory cessions to GIC Re and reinsurance cessions in the prescribed order of preference 11

12 Complying With Lease Agreement Condition & Indian Law GIC Re a Leading Global Reinsurer with Head Office in India with strong financials GIC Re s retentions protected by way of annual Excess of Loss Program that is placed in London and European markets with A rated securities. The Ultimate Net Retention <1% of the policy limits 12

13 Ranking & Ratings Ranks 10 th among International Reinsurers on the basis of Gross Premium Written 156 th Forbes Global Best Regarded Companies 2000 Rated: A- (Excellent) by A. M. Best for Financial Strength

14 GIC Re Performance Highlights: Parameter US $ million Gross Premium 5,180 6,420 Net Premium 4,653 5,780 Growth % 82.2% 24.50% Profit After Tax

15 GIC Re Premium Split Overseas 31% Domestic 69% 15 15

16 International Operations Lloyd s Syndicate GIC Re Syndicate 1947 Branches Dubai London Kuala Lumpur Wholly owned Subsidiary GIC Re South Africa Limited Representative Office Moscow Joint Ventures / Associates GIC Bhutan Re Limited India International Insurance Pte. Limited SEZ- India GIFT IIO, Gandhinagar, Gujarat, India 16 16

17 Unique Initiatives Capacity being watchfully and gradually increased Xchanging Platform for Premium and Claims Settlement is being implemented at Head Office Quoting / Leading in Asian - African region Strategic alliances 17 17

18 GIC Re Aviation Significant player in international aviation business Participation on programmes of 400+ Airlines 4 th Largest Aviation capacity Business Composition: - Writing all classes of Aviation business (barring XS War Liability) - Space Treaty and facultative - Advantages: Diversification, spread, growth - Approach: Selective & cautious and close monitoring Aiming to consolidate the position and emerge as a leader of choice in the domestic as also in the region to begin with. Experienced and Qualified teams in three separate verticals that service the business: Underwriting, Claims and Accounts 18 18

19 GIC Re Aviation Premium split Domestic 6% International 94% 19 19

20 Experienced Underwriting Team Experienced Underwriting Team Combined experience in aviation underwriting of over 65 years Mix of senior and fresh members Experience of writing direct business. Five Engineers including Two Aeronautical Engineers 20 20

21 Experienced Claims Team GIC Re Claims Team Mix of senior and fresh members One Aeronautical Engineer Network of Aviation Surveyors / Adjustors / Solicitors Systems in place for Quick Turnaround 21 21

22 Claims - Turnaround Average Turnaround Time: From the date of submission of documents till GIC Re s Agreement 3 to 7 days. From the date of submission of documents till Settlement of funds 10 days

23 Appreciation Letter from Sir Richard Branson, Founder Virgin Group for settlement of claim in respect of Virgin Galactic s SpaceShipTwo in October

24 Leadership / Co-leadership GIC Re s aims to be a preferred leader in aviation, especially in India and SAARC Region GIC Re has experience, expertise and wherewithal to be a leader Currently leading / Co-leads more than 25 Risks 24 24

25 Leadership / Co-leadership Some Examples Go Air Air India Indigo SpiceJet US Bangla (Bangladesh) Regent Airways (Bangladesh) Trans Maldivian Airlines (Maldives) Island Airways (Maldives) TruJet (India) Buddha Air (Nepal)..and many more 25 25

26 26 Participation in Major International Airlines Lufthansa British Airways Singapore Airlines Qantas Emirates Etihad Delta United American Air France.and many more 26

27 Participation in Major LCCs in the world Jet Blue AirAsia Ryanair easyjet flydubai Southwest Azul.and many more 27 27

28 Why GIC Re? Strong capitalization Market friendly & Long term relations Trained and dedicated manpower Negligible attrition rate Global risk spread Debt free organization Robust investment income Efficient IT infrastructure Sound ERM framework 28 28

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