Greetings from India GIC Re, the Indian Reinsurer, on its path to be a leading global reinsurer
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World Bank 3
World Economic Forum 2008 2018, Global Risks Reports 4
a sound national insurance and reinsurance market is an essential characteristic of economic growth. UNCTAD, 1964
E & Y 6
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Global Reinsurance Highlights 2018 Global Reinsurance Highlights 2018 Global Reinsurance Highlights 2018 8
Agriculture 18 Industry 24 Services 58 Statistica.com 9
80 60 40 20 52,34 52,64 55,45 64,49 0 2013-14 2014-15 2015-16 2016-17 Total Gross Written Premium (US$ billion) 30 25 20 15 10 5 0 29,791 27,03 18,19 20,94 2014-15 2015-16 2016-17 2017-18 First Year Gross Written premium (US$ billion) 10
25 20 19,69 24,069 15 10 12,42 14,54 5 0 2014-15 2015-16 2016-17 2017-18 Gross Written Premium (US$ billion) 11
Public Sector 10,99 20,676 69,4 Private Sector 9,114 18,1 30,6 0 10 20 30 40 50 60 70 % Market Share % Growth Gross Written Premium (US$ billion) Specialised Insurers Standalone Health Insurers 6,01 8,78 1,392 5,5 1,274 41,6 Private Sector 10,054 21,6 43,41 Public Sector 13 10,437 45,07 0 5 10 15 20 25 30 35 40 45 50 Market Share % Growth Gross Written Premium (US$ billion) 12
State induced schemes- Crop, Health Growing Middle Class Financial Inclusion Infrastructure Growth Innovative Products New distribution channels Hike in FDI limit Disinvestment Web Aggregators On line Sales Enabling regulation 13
1818 1956 + 1972 Private and Foreign participation 1973-2000 Government ownership and control 2000-2018 Private and Foreign participation
THE GENERAL INSURANCE BUSINESS (NATIONALISATION) ACT, 1972 ACT NO. 57 OF 1972 [ 20th September, 1972] 1973-2000 15
1973-2000 Reinsurance skill set development Global relations Strong balance sheet Assets/ Investments Loss Prevention Association National Insurance Academy Insurance Institute of India College of Insurance Credit Rating Pools Association of Insurers and Reinsurers of Developing Countries Federation of Afro Asian Insurers and Reinsurers Managing Compulsory Cessions 16
2000-2018 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 opportunities 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 our 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. 17
2000-2018 Life Insurers Non-life Insurers Specialised Insurers Reinsurers Branches of Reinsurers Agents Brokers TPAs Web Aggregators Insurance Repositories Insurance Associations 24 Companies 33 Companies 6- Health, 1 Agriculture, 1 Credit 2 Companies 10 Branches (including Lloyd s) Numerous Individual and Corporate Agents 433 Brokers (Direct, Composite, Reinsurance) 27 TPAs 26 Web Aggregators 4 Insurance Repositories Life Insurance Council and General Insurance Council 18
2000-2018 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. 19
2000-2018 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. 20
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
Branches Dubai London Kuala Lumpur Representative Office Moscow Wholly owned Subsidiary GIC Re South Africa Limited Joint Venture GIC Bhutan Re Limited Lloyd s Corporate Member GIC Syndicate 1947 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 1972 Well defined Business Continuity Plan in place 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 of Corporate Governance Comfortable Solvency Margin Socially Responsible
Key Financial Information and Performance Indicators For the year ended on March 31 st 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 23
5000 4500 4000 3500 3000 Capital INR Mln. 4300 4300 4300 4386 2500 2000 1500 1000 500 0 2150 1075 430 190 215 25 1973-81 1982 1986 1990-91 1993-94 2005-06 2014-15 2015-16 2016-17 2017-18 250000 Net Worth 215259 200000 INR Mln. 179466 150000 100000 50000 47591 59283 66838 77833 90266 99260 76855 92408 109686 130016 148300 0 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 24
7000 6000 NWRP USD Mln. 5796 5000 4674 4000 3000 2000 1000 0 2085 2321 2422 2534 2211 2216 2473 946 1120 50 80 212 240 291 402 1975 1980 1985 1990 1995 2000 2003 2005 2007 2010 2011 2012 2013 2014 2015 2016 2017 Global Rank 40 35 35 30 25 20 15 10 22 16 23 16 14 15 15 17 18 18 12 10 5 0 2004 2006 2008 2010 2012 2014 2016 2018 25
September 12, 2018 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. 10-09-2018 While retaining a robust market share in its home of India, GIC Re is increasingly competing on the international stage. GIC Re enters league of top 10 Global Reinsurers With the Indian economy acting as a driver of global growth among emerging ones, GIC Re can be expected to further enhance its position globally. September 12, 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 of 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 opportunity to access business from a globally reputed platform and enjoy better credit rating," says Vaidyan. 26
Global Footprint : Offices London, Dubai, Kuala Lumpur Johannesburg, Moscow Alliances Singapore, Thailand, Kenya, Tanzania, Bhutan Cooperation MoUs Myanmar, Indonesia Global Association: FAIR, AIRDC, SAARC, BRICS Data Analytics: India & SAARC markets IT and Tools: Modeling, Specific Research Relationship Building: MoUs Players, Regulators- SAARC, ASEAN, LATAM Upscaling: Lloyd s, UK, USA, Canada, EU Reinsurance Solutions: India & SAARC markets Training/ Skillset Development: India, SAARC, ASEAN markets Pools: Local, International
Deepak Godbole Moscow, 20 September 2018