The opening of the first London branch of GIC Re has far-reaching implications
The opening of General Insurance Corporation of India’s (GIC Re) new offices in London was not your usual reinsurance soiree.
The Indian reinsurer treated guests and VIPs to an extended opening ceremony including traditional Indian prayers, floral tributes and ceremonial lamps.
Indian Finance Minister Palaniappan Chidambaram welcomed the “giant step” in the international expansion of the GIC Re as he officially opened a new branch office for the Mumbai-based reinsurer.
“This is a great country, a great city, the world’s most renowned financial centre,” he said, “and I am happy to inaugurate GIC Re’s fully fledged office in London.”
Meanwhile Lord Bilimoria of Chelsea, chief executive of Cobra Beer and cross-bench life peer emphasized India’s growing importance in the world economy.
“India is on the move and increasingly taking centre stage. Despite living in turbulent times, super tanker India will weather the current world storms.”
“India is on the move and increasingly taking centre stage. Despite living in turbulent times, super tanker India will weather the current world storms
Lord Bilimoria of Chelsea
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.
The move is noteworthy in so far as it flies in the face of the recent trend for European insurers and reinsurers to open branch offices in the Far East, including India and China.
In August 2007 Munich Re announced that is was planning to open a branch office in India, with chairman of the board of management of Munich Re Nikolaus von Bomhard saying he saw a “wealth of opportunities” in India's booming insurance market.
Meanwhile the CII opened an office in Mumbai last year, saying “The Indian market is expanding very rapidly with a growing number of global companies establishing a presence. The CII is keen to play its part in ensuring professional standards are central to this expansion.”
And Lloyd’s, Swiss Re and Markel to name but a few have also done business in the country at some point in recent years.
“GIC has arrived
R. Chandrasekaran, General manager, GIC Re
The wealth of Western insurers and reinsurers setting up shop in India serves to illustrate the growing importance of the country and the prediction by GIC Re’s chairman Yogesh Lohiya that India will be the dominant economy in the world by 2050.
“We are not plucking low hanging fruit,” added Indian High Commissioner Kamalesh Sharma at the launch. “We will get rich before we get old.”
Mumbai-based GIC Re provides cover to 1,000 insurance companies operating around the world and is among the world’s 25 largest reinsurers.
The company was created in 1972 when India’s insurance sector was nationalised. The state-owned venture is now established in Asia and Africa, with its Mumbai headquarters supported by offices across India, as well as by operations in London, Dubai and Moscow.
In 2006-07 the company wrote net premiums totalling 64.2 billion Rupees (£833m), up nearly 52% on the previous year. Its after-tax profit rose 156% to 15.3 billion Rupees (£198m) over the same period.
As general manager R. Chandrasekaran stated confidently, “GIC has arrived.”