Q&A with GIC Re General Manager Satyajit Tripathy, who explains that even after significant loss events Asian prices have barely budged
What value does GIC Re place on Singapore as a reinsurance hub and what are your priorities for 2019’s SIRC event?
Singapore is a very important reinsurance hub and has grown in size and significance over the last few years. Many global reinsurers have opened offices in Singapore including Lloyds of London. All the reinsurers who have offices in Singapore other then reinsurers who have office in India write the Indian business through Singapore.
The proximity to India along-with the global infrastructure availability and the geographical location makes Singapore a preferred choice for reinsurers who write Pan-Asian business. GIC Re places a significant amount of retro business through Singapore. GIC Re also writes inward business from Singapore through our Kuala Lumpur Branch and at the HO.
The SIRC event is the most important reinsurance conference this side of the globe and is very well attended. There are plenty of business meetings with our cedants, retrocessionaires and other reinsurance related service providers which adds a lot of value to our business transactions. This being just before the January renewals it also sets the tone for the price movements in Asia Pacific region which helps us firm up our strategy for the renewals. Our priorities at SIRC would be to meet with stakeholders and customersdavin, discuss market developments and forge new business relationships across the region.
Asia is a region of rising insured values as the region’s economies expand: how do you view pricing relative to exposure values?
Although Asian economies have expanded and insured values have risen, the price increase has not been in tandem. These markets have not seen price increases. Reinsurance capacity has been available in plenty driving prices down. On the direct side, besides low capitalisation by local players, protectionism by local regulators and paucity of skills and resources have increased competition with increasing capacity chasing the same premium base.
Hence even after significant loss events not much of price increase has been witnessed. The potential offered by favourable economic conditions and low penetration has seen entry of foreign players and introduction of disruptive technology which gives access to new client segments and lower cost ratios. Hence pricing pressure seems to continue for the present.
Which territories and business classes feature within GIC Re’s business plan for underwriting Asia Pacific reinsurance business?
GIC Re has a branch dedicated to the region at Kuala Lumpur. Majority of the Asia Pac business is written out of this Branch. Apart from Property, Motor, Marine and Miscellaneous classes, the other lines of business are written out of Head office. Also major territories like Japan, China apart from SAARC countries are written out of Head Office.
Your home market of India is the world’s biggest crop re/insurance market: are you using that agricultural risk experience in your wider Asia business?
“We have gained sufficient experience in managing agricultural risk in the domestic market. We have used the know-how to underwrite agri business in the Asia region, specifically in China. However, we don’t intend to increase our Asia business further as it is currently a sizeable part of our overall global agricultural business.”