General Insurance Corporation of India (GIC) has seen a softening of reinsurance rates in the contracts renewed in the last few months. A K Roy, chairman and managing director of GIC Re, the sole domestic reinsurer said that the rates have come down by 20%. With no major natural catastrophe events, he explained that the insurance industry as a whole has reported better profits.
"The only way to improve our business is to work harder and write more business in this year," said Roy. At present, the domestic to international business mix of the reinsurer stands at 50-50.
With respect to the premiums from the Indian market, Roy said that the level of retention from the domestic market has increased. The amendments in the Insurance Law that allow foreign reinsurers to begin branch operations in India is still pending for approval, but Roy said that this will improve the situation in the market for them. "Unlike the perception, we do not have a monopoly in the market in India. If the law is passed, it will be an ideal condition since these (foreign) reinsurers do not have any restrictions or controls at this point," he added.
While the market is abuzz with reports that the third party pricing would be freed, Roy explained that in the long-run it would not be beneficial. While he explained that insurers should not overcharge, he added that the market will be stable only when the right premiums would be charged.
GIC Housing Finance to look at builder tie-ups
GIC Housing Finance (GICHF) is looking to have builder tie-ups for further expansion of their home loan business. Warendra Sinha, MD & CEO of GICHF said that though the company had some concerns with such arrangements in the past, the company would be looking to get into such partnerships with more caution. Further, Sinha also said that they would also be passed on the housing loan accounts of the four state-owned general insurers including New India Assurance, Oriental Insurance, National Insurance and United India Insurance. Sinha also explained that gross NPAs which stood at 1.8 last year down from the previous year, will see even better performance this year.