By Prasun Sonwalkar, IANS
London : Indian Finance Minister P. Chidambaram Wednesday opened a new branch office of the Mumbai-based General Insurance Corp of India and called it a ‘giant step’ in its expansion outside the country.
The Indian reinsurance major, better known in trade and finance circles as (GIC Re), provides cover to 1,000 insurance companies operating around the world. It is among the world’s 25 largest reinsurers. A reinsurer allows insurers to reduce their exposure to potential claims by sharing their policy risks with second-tier insurers.
Addressing an audience of more than 200 dignitaries and invited guests, the minister highlighted the growing influence of the reinsurer across the globe and forecast that its international expansion would continue in tandem with growing reforms within India’s insurance and financial markets.
He said: “GIC wishes to spread its wings throughout the world and emerge as an effective reinsurance solution partner. It is our goal to make GIC Re a world-class reinsurer. It already offers reinsurance support to 1,000 insurance companies”
Following approval from UK and Indian regulators, GIC Re has been able to upgrade an existing representative office to write business directly in the UK for the first time. Its new branch office is to focus initially on offering reinsurance cover for insurers involved in underwriting property, aviation and energy-related risks.
Among those attending the event were Indian High Commissioner Kamalesh Sharma and Lord Billimoria of Chelsea, together with GIC Re’s chairman Yogesh Lohiya and general manager R. Chandrasekaran.
Highlighting the recent growth at GIC Re, including large rises in its net premiums, after-tax profits and investments, Chidambaram said: “Today we bring you a company with strong financial fundamentals, an outstanding record of achievement in India, a willingness to adhere to international standards, a willingness to conform to standards set by international regulators and a willingness to compete with the rest of the world.”
He added that the London market was crucial: “This is a great country, a great city, the world’s most renowned financial centre and I am happy to be here this morning to inaugurate GIC Re’s fully fledged office in London.”
GIC Re’s London-based underwriting team will be supported by colleagues in Mumbai, with plans for the state-owned company’s UK presence to expand as business develops. The new London branch office is headed by Anil Sant, who has been appointed chief manager.
Welcoming guests to the opening ceremony, Lohiya said: “London has always been a true global leader for international business and reinsurance business, and it gives GIC great pride to see our operation here go from a representative office to a branch office.”
GIC Re was created in 1972 when India’s insurance sector was nationalised. The state-owned venture is now established as a market-leading reinsurer in Asia and Africa, with its Mumbai headquarters supported by offices across India, as well as by operations in London, Dubai and Moscow.
GIC Re is active in a wide range of insurance classes including property, marine, engineering, energy, aviation and motor. In 2006-07 the company wrote net premiums totalling 64.2 billion rupees (833 million pounds), up nearly 52 percent on the previous year. Its after-tax profit rose 156 percent to 15.3 billion rupees (198 million pounds) over the same period.