Greetings from India GIC Re, the Indian Reinsurer, on its path to be - PowerPoint PPT Presentation

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 64,49 60 55,45 52,34 52,64 40 20 0 2013-14 2014-15 2015-16 2016-17 Gross Written Premium (US$ billion) Total 29,791 30 27,03 25 20,94 20 18,19 15 10 5 0 2014-15 2015-16 2016-17 2017-18 Gross Written premium (US$ billion) First Year 10

25 24,069 20 19,69 15 14,54 12,42 10 5 0 2014-15 2015-16 2016-17 2017-18 Gross Written Premium (US$ billion) 11

69,4 10,99 Public Sector 20,676 30,6 18,1 Private Sector 9,114 0 10 20 30 40 50 60 70 % Market Share % Growth Gross Written Premium (US$ billion) 6,01 8,78 Specialised Insurers 1,392 5,5 41,6 Standalone Health Insurers 1,274 43,41 21,6 Private Sector 10,054 45,07 13 Public Sector 10,437 0 5 10 15 20 25 30 35 40 45 50 Market Share % Growth Gross Written Premium (US$ billion) 12

State induced schemes- Growing Middle Class Financial Inclusion Crop, Health Innovative Products Infrastructure Growth Disinvestment Hike in FDI limit New distribution channels On line Sales Web Aggregators Enabling regulation 13

1818 – 1956 + 1972 Private and Foreign participation Government ownership and control 1973 - 2000 Private and Foreign participation 2000 - 2018

THE GENERAL INSURANCE BUSINESS (NATIONALISATION) ACT, 1972 ACT NO. 57 OF 1972 [ 20th September, 1972] 1973 - 2000 15

1973 - 2000 Reinsurance skill set Global relations Strong balance sheet development Loss Prevention Assets/ Investments Association National Insurance Insurance Institute of India College of Insurance Academy Credit Rating Pools Association of Insurers Federation of Afro Asian Managing Compulsory and Reinsurers of Insurers and Reinsurers Cessions Developing Countries 16

2000 - 2018 With the matrix of general insurance I can only say that the phaseout of obligatory business set for major changes after cessions would have some impact on GIC Re, January 1, 2007, and companies being but I will not give it much significance. GIC Re is allowed to fix their own prices in fire, now competing for business on the basis of engineering and motor insurance, the 20% price, service and expertise. We have diversified compulsory cession to GIC Re may our area of operation by accepting new lines ultimately go, although in phases. such as life reinsurance, off-shore energy and “It is possible that compulsory cession may liability business. Risk management and ultimately go. Actually, compulsory cession assessment capabilities are being enhanced to is one of the key tools in the hands of the provide value-added services to clients. We are regulator to optimise retention within the now concentrating on increasing our international country. They also create an automatic portfolio. capacity which is useful for the Indian companies,” a senior GIC official said. In the various conferences and fairs that I have The national reinsurer is already preparing attended, I have noticed that insurers in the ground to reduce the dependence on its developing world hold GIC Re in high regard. compulsory or obligatory premium, which These insurers have also tried out some of the contributes 82% of the domestic large global players and have seen how they reinsurance premium at present. It is likely have responded after a bad year. We thought if to explore a larger pie in the international that is the case why not encash that feeling that business and also seek strategic insurance companies have. opportunities abroad. 17

2000 - 2018 Life Insurers 24 Companies Non-life Insurers 33 Companies Specialised Insurers 6- Health, 1 Agriculture, 1 Credit Reinsurers 2 Companies Branches of Reinsurers 10 Branches (including Lloyd’s) Agents Numerous Individual and Corporate Agents Brokers 433 Brokers (Direct, Composite, Reinsurance) TPAs 27 TPAs Web Aggregators 26 Web Aggregators Insurance Repositories 4 Insurance Repositories Insurance Associations 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 Representative Office  Dubai  Moscow  London  Kuala Lumpur Wholly owned Subsidiary GIC Re South Africa Limited Lloyd’s Corporate Member Joint Venture GIC Syndicate 1947 GIC Bhutan Re Limited 2018  Trained and dedicated manpower  Secure grade credit rating  Induction of fresh specialist talent  Very strong capitalization  Low Management Expenses  Large capacities offered 1972  Debt Free Organization  Multi locational office network  Robust investment income  Global spread of risks  Best global practices in the area  Strong IT and ERM framework of Corporate Governance  Robust and dynamic risk  Comfortable Solvency Margin governance structure  Socially Responsible  Well defined Business Continuity Plan in place

For the year ended on March 31 st Key Financial Information and YoY Growth Performance Indicators 2018 (US $ Mln) 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

Capital INR Mln. 5000 4386 4300 4300 4300 4500 4000 3500 3000 2500 2150 2000 1500 1075 1000 430 215 500 190 25 0 1973-81 1982 1986 1990-91 1993-94 2005-06 2014-15 2015-16 2016-17 2017-18 250000 Net Worth 215259 INR Mln. 200000 179466 148300 150000 130016 109686 99260 92408 90266 100000 77833 76855 66838 59283 47591 50000 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 NWRP 5796 6000 USD Mln. 4674 5000 4000 3000 2085 2321 2422 2534 2211 2216 2473 2000 1120 946 1000 402 291 240 212 50 80 0 1975 1980 1985 1990 1995 2000 2003 2005 2007 2010 2011 2012 2013 2014 2015 2016 2017 Global Rank 40 35 35 30 25 23 22 20 18 18 17 16 16 15 15 15 14 12 10 10 5 0 2004 2006 2008 2010 2012 2014 2016 2018 25