New Delhi, Jan. 22: General Insurance Corporation of India, the national reinsurer, is planning an aggressive foray abroad to ratchet up its foreign inward business that currently amounts to a little over 6 per cent of its overall premium income.
For starters, GIC plans to open offices in Dubai, Malaysia and China in fiscal 2003-04.
“We are aiming for a growth of at least 35 per cent this fiscal in our foreign inward business,” GIC chairman P.C. Ghosh told The Telegraph. “In 2001-02, we earned approximately Rs 175 crore through this route and hope to increase it substantially this year.”
Ghosh said, “China is a very fast growing market; so it will be always very beneficial to do business there. The insurance market in Dubai has both volume and quality. The Malaysian market is very strong, we have been doing business with Malaysian National Reinsurance Corporation.”
GIC, which became the national reinsurer last November, has received business from both public sector insurance companies and the private players. Foreign inward business is the business it gets from foreign insurance or reinsurance companies.
GIC does business in approximately 50 countries but has no presence in the US. The total premium income of GIC in 2001-02 was Rs 2,671 crore. Out of this, almost Rs 2,496 crore was earned from the domestic market (India) including public sector insurance companies and the private players.
It earned an accounted premium income of Rs 175 crore from foreign inward business during that period. Before GIC was delinked with its four subsidiaries—United India Assurance, New India Assurance, Oriental Insurance and National Insurance—it earned only Rs 50 crore from its overseas business.
Post demerger, it has increased its overseas business by 100 per cent. Although GIC has not formed any joint venture or alliances, it shares a reinsurance portfolio with some well-known reinsurers like Munich Re, Swiss Re, Axa Re and AIG Re.
Ghosh said, “The US is a very risky area because insurance liabilities are very high. Moreover, the legal procedure of doing business there is very peculiar and cumbersome.” Canada is another country from which GIC earned less than 0.1 per cent of its entire premium.
At present, GIC has two overseas offices in London and Moscow which it opened in 2001 and 2002 respectively. Ghosh said “We are getting some percentage of business from all the countries; if we set our own people and offices abroad, our business will multiply faster.”