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REINSURANCE IN INDIA

Until GIC was notified as a National Re-

insurer, it was operating as a holding / parent

company of the 4 public sector companies,

controlling their reinsurance programmes.

GIC would receive 20% obligatory cession

of each policy written in India.

Since deregulation, GIC has assumed the role

of the market’s only professional re-insurer.

In order to focus on reinsurance, both inIndia and through its overseas offices and

trading partners, GIC has divested itself of

any direct business that it wrote prior to

November 2000, with the temporary

exception of crop insurance. It currently

manages Hull Pool on behalf of the market,

which receives a cession from writing

companies and after a pool protection the

business is retro-ceded back to the member

companies. GIC also manages the “TerrorismPool”.

REINSURANCE REGULATION

The placement of reinsurance business from

tbe Indian market is now governed by

Reinsurance Regulations formed by the

IRDA. The objective of the regulation is to

maximize the retention of premiums within

the country and to ensure that IRDA has

issued the following instructions:

• Placement of 20% of each policy with

National Re subject to a monetary limit for

each risk for some classes• Inter-company cession between four public

sector companies.

• Indian Pool for Hull managed by GIC.

• The treaty and balance risk after automatic

capacity are to be first offered to other

insurance companies in the market before

offering it to international re-insurers.

• Each company is free to arrange its own

reinsurance program, which has to be

submitted to the IRDA 45 days beforecommencement.

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• Not more than 10% of reinsurance

premium to be placed with one re-insurer.

• No re-insurer will have a rating of less than

‘BBB’ from Standard and Poor’s or an

equivalent rating from AM Best.

General Insurance Corporation of India

GIC as a national re-insurer is providing useful capacity to all insurance companies.

Break-up of Net Premium Income & Claims

Figures in INR millions

Division Premium Claims

Indian Reinsurance 21,996.3 19,898,2

Foreign Inward 1591.4 1498.9

Aviation 244.1 186.1

Crop 2,880.6 1367.6

Total 26,712.3 2,950.8

Corporation's Financial Results - (Class Wise)

Figures in INR million

Fire Miscellaneous Marine Total

Net Premium 6,349.9 18,286.5 2,075.9 26,712.3

Net Earned Premium 5,070.8 17,46.4 2,267.5 2,384.7

Net claims 3,562.3 18,078.3 1,310.2 22,950.8

U/W Profit/loss -672.5 -5,013.7 512.2 -5,174.0

Class-wise Profit/Loss after

investment income -13.7 -544.5 1077.5 519.3

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GIC as International Re-insurer

Backed by experience of more than three decades in handling the reinsurance requirement of

the Indian market, GIC has now placed itself as an effective ‘Reinsurance Partner’ to Afro-Asian

countries and also other markets. If offers a capacity of US$ 50 million on facultative risks and

US$ 10 million for treaty business.

Capacities offered by GIC for foreign inward business: Figures in USD

Other than Aviation PML SI Spares

Treaty 4 Mln. 10 Mln.

Facultative 20 Mln. 50 Mln.

Hull Liability Spares

Aviation

Facultative 5 Mln.* 30 Mln.* 5 Mln.*

Treaty 300,000***

Hull * any one hull; Liability * any one risk; Spares * any one occurance; *** per contract

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