New Delhi, Sept. 14: Insurers and re-insurers from Asia plan to hold a three-day brainstorming session in Goa next week to evolve their own rating standards to thwart the “bias” of global rating agencies against financially strong Asian companies.
Beginning on September 15, a large number of Asian insurers and reinsurers from India, China, Taiwan, Bangkok, Thailand, Singapore, Malaysia and Indonesia will work together to develop a credit rating system specifically for the region.
The meeting might see the formation of a bureau or a committee to look into the modalities of developing a strategic rating system.
“Standard and Poor’s gives us sovereign rating on a global basis. Most strong companies in India and other developing nations never get an AAA rating due to socio-political factors prevailing in our respective countries. But this does not negate the fact that we have financially strong companies with excellent track records,” said managing director of General Insurance Corporation P. B. Ramanujam, who is representing the domestic insurance and reinsurance industry.
“Lower credit rating given to financially strong and stable companies spoils their image. In order to evade this, it is essential to create our own rating mechanism,” said Ramanujam.
Reinsurance majors like Toa Re, Korean Re, China Re, Singapore Re and Asian Re are some of the key participants who will attend the three-day meeting. “Even Africa has developed this kind of exclusive rating mechanism. Our aim is to create a common standard of rating system applicable to the Asian region uniformly,” the official said.
GIC is also organising the second Indian insurers’ summit in Goa next month to discuss issues of relevance to the non-life industry.