Business insurance

GIC Re plans to expand its GIFT City office

State-owned reinsurer General Insurance Corporation of India (GIC) plans to turn its GIFT City office into a subsidiary, which will make it a reporting hub for international business and will also conduct direct insurance business from there in foreign territories.

“GIFT City gives us the advantage of also doing direct insurance. We may consider turning our GIFT City branch into a subsidiary and then handing over all of our overseas operations to GIFT City,” said Devesh Srivastava, Chairman and CEO of GIC Re.

If GIFT City becomes a subsidiary, it may support overseas operations with other overseas branches and subsidiaries reporting to it. GIC’s head office in Mumbai would then handle the domestic reinsurance business.

Such a move would have several benefits, including tax benefits, Srivastava said. It would also allow GIC Re to do direct and reinsurance business from there.

GIC Re already undertakes direct aviation insurance business globally and does some of this from its GIFT City branch. Srivastava said there is great potential for direct insurance in oil and energy, but the insurer has not launched it yet.

Direct insurance can only be taken out in certain countries where the regulations do not require the insured to first contact an insurer. For Indian companies, GIC Re would continue to operate as a reinsurer.

“As a subsidiary (in GIFT City), it will be much easier to grow our business,” he said.

Although GIC Re has already started the process of handing over operations, Srivastava said it might be difficult to give an exact timeline. It could take two to three years, he added.

He also said the reinsurer will continue to have a footprint in various countries where it currently operates, but reporting will be to the city of GIFT.

GIC Re had closed its Dubai office in July last year as its license had not been renewed and moved its operations from there to GIFT City.

Srivastava said much of the Dubai business is now written from the GIFT City office.

“In the renewals, there were cases where people preferred not to come to Gift city. We will keep the business in Dubai for another year, maybe,” he said.

The reinsurer opened its office in GIFT City in 2017.

GIC Re reported a 42.4% growth in net profit for the quarter ended 31 March 2022 to ₹1,795.4 crore from ₹1,260.44 crore in the same period of the prior year with a growth in gross premiums and underwriting profit.

For the full financial year 2021-22, it made a net profit of ₹2,005.74 crore, 4.4% higher than the net profit of ₹1,920.4 crore in 2020-21.

The board declared an interim dividend of ₹2.25 per share.

Published on

May 28, 2022