SUNDAY
15.10.17
Interview:
Alice G Vaidyan, GIC Re
More growth ahead
Indian reinsurer GIC Re is preparing to launch an IPO. Chairman-cum-managing
director Alice G Vaidyan explains the reasons behind it and the company’s plans for
the months ahead to PCI Today.
You are preparing to launch an IPO. What
is the strategy and rationale behind this?
Far more accountability, visibility and
transparency will be brought forth as far as the
initial public offering (IPO) is concerned. Listing
helps shareholders become participative and tap
into the opportunities that in turn help further
the expansion plans of a company.
GIC Re has already filed its preliminary
prospectus with the market regulator the Securities
and Exchange Board of India (SEBI) and is
awaiting final approval. We have simultaneously
commenced preliminary deliberations with
domestic and international investors.
How might this change your approach and
strategic direction?
We will have more liberty going forward to raise
capital in order to fund our growth objectives as
it is mandatory to have a minimum of 25 percent
floating stock in the market over a three-year
period, this being a SEBI stipulation.
With the addition of public and institutional
shareholders to the ecosystem of our stakeholders,
there will be greater interaction with the investment
community. This will lead to greater transparency
and benchmarking of GIC Re’s performance.
How do you plan to seek growth in a soft
market?
Our main thrust is towards diversification across
product lines and geographies—segments such
as agriculture, cyber, liability, and life will witness
greater commitment. We would also be focusing on
optimising and prioritising our client relationships,
and being seen as a market-friendly reinsurer.
In which new geographies or product lines
is GIC Re looking to grow?
Our growth plans include establishing a syndicate
at Lloyd’s of London which will write a variety
of classes of business from different parts of the
world; expanding our relationships with insurers
Alice G Vaidyan
“Our growth plans include
establishing a syndicate at
Lloyd’s of London which will
write a variety of classes of
business from different parts of
the world.”
in the US and accepting more US-related risks;
establishing representative offices in China;
establishing a representative office in Brazil to
expand our Latin American business; converting
our Moscow representative office into a whollyowned
subsidiary and expanding our reinsurance
business in Russia and CIS countries from
Moscow; and establishing a strategic relationship
for reinsurance business in Myanmar and
establishing a representative office in Bangladesh.
We would continue with our focus on growth
markets. In terms of product lines, we intend to
grow our domestic health and liability business,
and our overseas property, space and cybersecurity
lines, besides life and agriculture business.
What growth opportunities do you see in
North America/LatAm?
North America and Latin America remain
priority focus areas for us. We have worked
consistently in the last few years to tap into the
ample growth opportunities that are offered by
a market hitherto untapped by us. What makes
Latin America attractive is that it has remarkable
economic growth that has made the region an
interesting and more stable business destination.
Regulatory reforms over the last decade
have created a more business-friendly financial
environment for the insurance industry which is
conducive for our business to grow.
What are the regional challenges of doing
business in North America/LatAm?
There are sharp regional variations in economic
conditions and demand for insurance products in
the North America/LatAm region so a ‘one size
fits all’ approach is not suitable and one needs to
have a more nuanced approach.
The challenge lies in handling the region’s
heterogeneity. Each country is unique, and
assessing its degree of attractiveness requires
country-specific insurance market and economic
outlook analyses. Latin America’s growth rates are
substantial, but account for just under 4 percent of
the world’s total insurance premiums. Moreover,
insurance penetration—annual premiums over
gross domestic product (GDP)—is very low
compared with developed countries, so these are
factors that present bright prospects for growth.
Annual premiums and interest in specific
markets must be considered along with business
indicators such as political stability, economic
policy continuity and market risk factors. n
Alice G Vaidyan is the chairman-cum-managing
director of GIC Re. She can be contacted at:
cmd@gicofindia.com
12 | PCI TODAY | DAY 1: Sunday October 15 2017 www.intelligentinsurer.com | www.bermudareinsurancemagazine.com