Gic Revamp Likely In Three Weeks

This was announced by the chairman of GIC, D Sengupta, at a meeting with the members of the Bengal Chamber of Commerce & Industry. He said restructuring is a must for the survival of GIC and the four subsidiaries.

Two consultants -- PricewaterhouseCoopers and M P Chitale -- have prepared two reports on the restructuring of GIC. However, both reports turned out to be totally diverse in nature. Thereafter, the boards of the four subsidiaries tried to find a convergence of these two reports.

The three restructuring options that are being considered include the merger of the four subsidiaries, or making them totally separate companies. The third option is merging two and leaving the rest as separate entities.

 

Sengupta, however, felt the second option of making the four companies as a different companies is most viable. In such a scenario, GIC is would emerge as the national reinsurer.

"If GIC plays the role of a national reinsurer, then there can be a co-ordinating agency for the four companies. It can be a possibility, but it is my view and I do not know what the Union government will decide," Sengupta said after the seminar.

He also felt that in near future there will be convergence of the life and general insurance sector. "Going by the recent trends in the global insurance sector, there will not be two separate businesses. Instead, there will be a convergence of the two," Sengupta added.

According to him, a number of insurance products from the GIC and its subsidiaries' stable are not financially stable. "If we are given an option we will move out of a number of areas," he said. When asked to specify, Sengupta mentioned motor insurance is one such sector.

In the liberalised market, GIC would also like to diversify and enter the financial services market and would offer products like securitisation of loans and debts.

The corporation is also trying to introduce a managed healthcare product. "The annual premium would be around Rs 4,500 and it would try to cover all aspects of health. We are trying to get some income tax benefits for it. The products holds immense potential. The boards of the subsidiaries have cleared the proposal but we need a final nod from the Union government," Sengupta said.