Industry Profile : The modern reinsurance industry’s evolution dates to 1842, when the first reinsurance company, Cologne Re, was established in Germany. Industry giants, such as Swiss Re and Munich Re, were also established around the same time. Reinsurance refers to the arrangement whereby insurers transfer part of the risks and liabilities written to one or more insurers or reinsurers by entering reinsurance contracts. Reinsurance is considered as the insurance of insurance. Retrocession is the risk transfer by a reinsurer in the same way. Retrocessional coverage consists of reinsurance purchased to cover a portion of the risks that the reinsurer is covering for the underlying insurance companies.
Treaty reinsurance :
Facultative reinsurance :
Proportional (quota – share).
Non – Proportional (excess)
Company Profile : Incorporated in 1972, GIC is largest reinsurar in india in terms of gross premiums accepted in Fiscal 2017, and accounted for approximately 60% of the premiums ceded by Indian insurers to reinsurers during Fiscal 2017. The company is operating is 162 countries and ranked 12th largest Global reinsurance company in 2016. The company provide reinsurance across many key business lines including fire (property), marine, motor, engineering, agriculture, aviation/space, health, liability, credit and financial and life insurance. The company having branch offices in London, Dubai and Kuala Lumpur, a representative office in Moscow, a subsidiary in the United Kingdom that is a member of Lloyd’s of London and a subsidiary in South Africa. The Company write reinsurance for every non – life and over half of the life insurance companies in India and have long – term business relationships with almost all of these domestic insurance companies.
The company Rated A For AM Best rating.
Shareholding Pattern : After IPO 14.22% stake is held by General Public out of which 5%+ is held by LIC. 6k cr Subscription From LIC in 11k cr+ IPO. Remaining is held by Goverment of India.
Financials and ratio :
|2013 - 14||2014 - 15||2015 - 16||2016 - 17|
|Income from investment||982.679||1302.069||1436.365||1638.407|
|Net Benefits paid||12,107.294||11,913.125||12,965.912||21,529.312|
|Investment Income Ratio||7.21%||9.57%||9.36%||6.21%|
Future prospectus : Govt open Reinsurance Sector for Private sector players since 2016 and so Many MNCs as well as Indian private companies entered in market, but Being Public sector company it is very easy for GIC to dominate market. In contradiction with Global trend, interest rates in india are high and while writing it is expected that Rate cycle is going upword. This factors are helping to the company. During reent IPO Company Came up with Fresh Equity with which it increased its capital base. IPO also help the company to rope LIC as its investor. Recently HDFC group also entered in Reinsurance market with setting up reinsurance company in London. Berkshire Hathaway also setting up business in India.
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