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International growth plans for GIC Re to include Lloyd’s syndicate

August 17, 2017

General Insurance Corporation (GIC Re), India’s state-backed reinsurance company, filed an Initial Public Offering (IPO) with the Securities and Exchange Board of India. This IPO has been filed with a plan in mind to diversify its revenue base into life insurance and expand the business lines throughout the global market including space and cyber security.

The IPO constitutes 14.22 percent of the firm’s post-offer paid-up equity share capital and is expected to hit the market around October or November this year, potentially raising upwards of $1bn to help fund the firms growth.

Currently, non-life insurance business accounts for approximately 95 percent of the firm’s total premium ceded in Fiscal 2017, however, the carrier aims to rebalance its underwriting lines through moving into the underexplored life segment.

In the prospectus, GIC Re said: “We believe that the Indian life insurance market offers a growth opportunity for us due to its high growth rate primarily driven by low penetration levels. We intend to market reinsurance of life products to all participants in the Indian life insurance market.

“In particular, we are looking to create customised products for domestic life insurance companies to expand our business.”

The firm also hopes to cross into the international life reinsurance segment through building on overseas relationships in SAARC (South East Asia, Latin America, Africa and China.)

In Fiscal 2017, GIC Re’s overseas reinsurance underwriting represented 30.53 percent of its total gross premiums on a restated consolidated basis – the firm now aims to “achieve a balance of international and India business in terms of premiums” with ambitious growth plans internationally.

GIC Re’s ambitious international growth plans include establishing a Lloyd’s of London syndicate, accepting more U.S. insurance related risks, setting up offices in China, Brazil, and Bangladesh, and expanding Latin America business.

The carrier also hopes to convert its Moscow office into a subsidiary and build a strategic relationship for business in Myanmar.

The IPO listing signals recognition of the need for international capital influx and diversification to achieve expansion plans and to be in a stronger position to service the government’s insurance schemes to safeguard and catalyse the country’s booming economic growth.