Page 39 - Insurance Times Janaury 2021

A. I believe that this assessment which has been done, taking
I think the data will also play a big into account the various kind of situations that are
role in this, the better data you get, emerging, I believe we are almost close to what the
prediction is there for the Indian insurance market, half a
and better would be the process.
billion here and there we should be close to that by 2024.
Availability of data is not an issue The general insurance industry itself is growing rapidly and
though, in the Indian context, the in another five years, we should be reaching that size as far
as the re- insurance marketplace is concerned.
quality of data remains a concern, but
things have improved a lot. Q. Do you think climate change will pose a bigger
risk and challenge than the pandemic that we
terrorism pool, and Nuclear Pool. The terrorism pool actually have faced?
started in 2002. In the last 18 years, there has been only A. We are closely monitoring and observing the situation. I
one claim of 26/11 Mumbai attack in which 376 three crores will give you an example, when the Prime Minister Fasal
were paid. Basically, the pools operate based on a Bima Yojana, Agricultural Insurance, was launched in the
contribution by all the participants and a corpus built over country in 2016, in the first year the overall premium was
many years. something like 17000 to 18000 crore in the Indian market,

The nuclear pool, which started in 2015, hasn't seen any which has now reached around 30000 crores in 2020. We
claim till date, and it is imperative to mention that the pools are witnessing frequent weather patterns that are affecting
actually generate the corpus as soon as possible and as large crop/ agriculture as a whole.
as possible, and both the pools have got now sizeable corpus If you take data on the decadal basis for the last hundred
and are managed effectively by GIC Re. years for India, you will find that post-1980 onwards in the
The pool accounts, there reconciliations are absolutely in line last 40 years, the incidence of drought has actually increased
with whatever is being done worldwide. And whatever a lot. Earlier you used to have one or two droughts per
situations arise, the pool would rise to the occasion. decade, now it has gone up four to five droughts per decade.
In the ten years, we have seen at least three to four
Q. Recently, IRDA has identified, GIC-RE as one of droughts. So these patterns are definitely a derivative of
the three systemically important insurers. So what is happening as the weather situations.
does this increase your responsibility and how do So, yes, catastrophes are increasing their impact on overall
you look at it? processes, on agriculture, on various other industries. The
industry situated on the coastal lines are also increasing
A. It certainly does. I mean, whenever the countries have
identified the systemically important institutions in the manifold. And I believe that the impact on insurance and
economy and the capital markets as a whole, their reinsurance will be more in the coming years. The
responsibility increases manifold. You have to see because companies are also prepared for it.
your identification comes to the fact that in case anything
going wrong, there is going to be a cascading effect in that Q. Do you think data plays an important role in
sector and the industries associated with you. the Insurance Industry?
A. I think the data will also play a big role in this, the better
Also, your responsibility increases thereby. And you also have
data you get, and better would be the process. Availability
to be much more fleet-footed as far as compliance is
concerned. And we are also a listed entity. So all these things of data is not an issue though, in the Indian context, the
together, we have to be very, very careful and have to keep quality of data remains a concern, but things have improved
our eyes and ears open as far as compliance and regulation a lot. But the second issue here is how do we utilize this
are concerned. And GIC Re will definitely meet all the data? How do you utilize the models that are available to
obligations that are required or have been identified as a you? Whether the models are actually proving whatever
your conclusions are, but yes, various types of data are being
systemically important institution.
used by the industry, various pieces of the inputs that are
Q. As per Global Data report India’s reinsurance going into models that are also increasing day by day.
market will reach US$7.8bn by 2024. What is And I think going forward, the research and development
your take? in this field also need to be expedited. Because the more

The Insurance Times, January 2021 39