We are expanding footprint prudently

Written by Sitanshu Swain | Updated: Apr 5 2011, 06:08am hrs
The recent spate of natural calamities in Asia Pacific region including the massive earthquake and tsunami have put enormous pressures on the global insurance business. Yogesh Lohiya, CMD of GIC, speaks to FEs Sitanshu Swain about the way these disasters will affect GIC and countrys insurance business.

Has it been possible for the GIC to estimate Japanese exposure and possible claims What are the sectors in Japan GIC has exposures

We write worldwide risks. GIC primarily has exposures in property in Japan. The situation is still being assessed so it will take sometime to estimate and evaluate our exposure and claims there.

Will GIC be more cautious now to underwrite the business in this region

GIC has always been a cautious and prudent reinsurer in all regions of the world. CAT losses are a global phenomena.

What kind of exposures GIC had in the recent floods in Australia and earthquake in New Zealand

Mainly property. Claim figures are still to flow from primary insurers. Due to large scale of losses it will take many years to be rebuilt and claims will be paid accordingly.

Do you think GICs aggressive overseas strategies is now becoming counterproductive as you have to pay large claims for your overseas exposures

GIC has never been an aggressive player. We have always been slow, but steady. We are expanding our global footprint prudently. All organisations, not only insurers/reinsurers, need to go global in todays world. And reinsurance is a cyclical process and so losses and claim periods go side by side.

Will the spate of claims out of the recent calamities push up reinsurance premium How much it will affect the Indian markets

Certainly, there will be some hardening of the market. However, the effect on the Indian market should be minimal. Insurance is a business of spread so the effect of Australia/New Zealand and Japan would no doubt impact the Indian markets but it would be nominal.

It is believed that most of the major reinsurers like Swiss, Munich, SCOR, have reduced their exposure for Indian markets. Has it paved the way for larger business for your company

I dont think you can call it reduction in exposure. It is their perception of the rates, terms and conditions that are applied by the domestic insurers after detariffication. As far as our strategy for the Indian market is concerned, it has always been one of support. We have always supported the Indian market through thick and thin, whether it was 2001, 2005 or now.

Do you think prices which had hit the rock bottom for last three years in Indian market will improve at the time of renewal this year in on April 1

We are hopeful that things will look up on this front from now on. There have been signs that the insurers will apply the right price to the various risks that come to them. The price war cannot continue for long.

Will the recent Irda norms on third party motor premium affect you as GIC reinsurers 10% of such business How do you see its impact on third party motor pool which GIC manages

No, there will not be any impact on GIC of the new norms by Irda as regards the third party motor premium. Even on Pool there wont be any impact.

What are your views on governments initiative on allowing reinsurers to set up branch operations

We have always believed in a policy of partnership. Even as we increase our global foot print, we are already working with foreign reinsurers there. So nothing new will happen if they come here. It would rather help us to perform better and achieve better results. Also, the Indian market would have the advantage of their knowledge and experience. Of course, there need to be some norms and regulations to regulate how they do business here.