Attack On Us: Gic May Face $5 Million Loss

The General Insurance Corpora- tion (GIC) estimates that against its $9 million insurance exposure in the US, it might be hit with a maximum loss of $5 million.

This exposure to the US market is on account of treaties signed by GIC with a London broker, wherein a small portion of the insurance programme included this US exposure, explained GIC sources.

The exposure was largely concentrated in the World Trade Center and properties in the vicinity.

"Out of the estimated losses, we would have to bear $1 million on our own books, while the balance would be taken care of through our excess of loss protection cover," said sources. GIC's net worth as on March 31, 2001 stood well in excess of Rs 2,600 crore (around $540 million).

GIC follows a prudent decision in not accepting business directly from the US market, company sources said, adding that the business in the US is risky, rates are low and liabilities huge.

The Indian market does not have much insurance penetration, but the US boasts of being the fourth largest spender in insurance products.

According to latest figures, the most hit will be Munich Re which estimates claims in excess of $900 million, followed by Swiss Re at $720 million. Allianz, which also has a presence in India, expects claims to hit $630 million plus. There are also smaller insurance companies whose exposures are in line with GIC's. Ohio Casualty estimates losses of $7 million.