Page 44 - Insurance Times July 2022

the growth and development of any economy. Insurance GIC Re-recorded a financial loss of 3.59 billion INR (47.72
helps and supports people as also an industry in case of million USD) in the 2019-2020 fiscal year, compared to a net
accidents and insurance investments that are long-term in profit of 22.24 billion INR (319.67 million USD) in the
nature aid in infrastructure development for a developing previous fiscal year.
economy. By promoting appropriate risk management and
providing a source of finance to respond to damages and The obligatory reinsurance cession rate in India has been
losses sustained by consumers, corporations, and reduced by the Insurance Regulatory Authority of India
governments, the insurance industry also plays an important (IRDAI). The proportion decreased from 5% in the years
role in minimizing risks in the economy. 2021-2022 to 4% in the years 2022-2023.

Reinsurance is a high-capital industry. It also has to adhere How Reinsurance Affects the Direct
to reserving regulations similar to those used by insurers,
Insurer
implying that profitability and dividend declaration/release
will take a lengthy time. It's a business whose prospects are The reinsurer offers value to the services a direct insurer
provides to his clients in a variety of ways.
intertwined with those of primary insurers, and reinsurer
By taking on the direct insurer's disaster risks, the
profitability is a pipe dream in an era of fierce competition
reinsurer minimizes the likelihood of the direct insurer's
and sloppy/unscientific rate making on the part of primary
failure.
insurers.
By taking up a portion of the direct insurer's risk of
GIC Re was founded in 1972 as an Indian reinsurer in the random fluctuation, change, and error, he helps to
expanding reinsurance market. It began as a single point of stabilize the balance sheet.
contact for the four state-owned Indian general insurance
By covering huge sums-insured and highly exposed risks,
firms to safeguard their risks, and then grew into a full-
he improves the direct insurer's portfolio's balance.
service worldwide reinsurer.
He increases the capacity of the direct insurer's
underwriting by absorbing a proportional share of the
The Market for Reinsurance expansion in risks and providing a portion of the required reserves.
India By releasing stock that had been tied up to pay risks,
In India, the sole indigenous reinsurance business, General he raises the amount of capital effectively available to
Insurance Corporation of India (GIC Re), has long had a the direct insurer.
monopoly on professional reinsurance activities. Recent He improves the efficiency of the direct insurer's
legislative amendments have progressively opened the operations by providing a variety of services.
market to multinational organizations, making it easier to
Kinds of services: for example, by
create overseas reinsurance offices.
Getting underwriting data from all across the world and
putting it together:
GIC Re is primarily focused on Asia, the Middle East, and
Africa, with subsidiaries in the United Kingdom, Russia, the Special dangers are assessed and evaluated.
United Arab Emirates, Malaysia, South Africa, and Brazil.
Provision of loss prevention consultancy
Supporting actuarial work by assisting with loss
During the 2018-2019 fiscal year, GIC Re held 81 percent of
adjustment.
the Indian reinsurance market's revenue or 6.357 billion
dollars. At the end of the 2019-2020 financial year, which Members of the cedent's team are being trained in the
following areas
ended on March 31, 2020, the Indian reinsurance market
as a whole recorded a turnover of 637.12 billion INR (8.46
billion USD). This is a 16.57 percent increase over the 546.56 Business Figures of Re-Insurance in India
billion INR (7.85 billion USD) reported in the previous fiscal One of the most important factors of reinsurance is to
year. With a turnover of 510.3 billion INR, the General reduce the disruption in India or worldwide. Because of the
Insurance Corporation of India (GIC Re), the only domestic increased pandemic uncertainty, reinsurance demand is
reinsurance provider, controls 80.09 percent of the market rising. While improving pricing movement is a huge plus for
(6.78 billion USD). both the reinsurance and insurance sector, economic

44 The Insurance Times, July 2022