GIC Re has won the bid to be the lead re/insurer for India’s government backed offshore energy provider Oil and Natural Gas Corporation (ONGC).
State-run reinsurer General Insurance Corp of India (GIC Re) will be able to take a 15% line on the ONGC program, which looks to re/insure upstream offshore assets (such as oil and gas platforms, rigs, production facilities and pipelines) with a value of over US $40 billion.
ONGC is the largest energy company in India and ranks 20th among global energy majors, according to Platts.
Despite the fact GIC Re would have been entitled to 5% of the program anyway, as a domestic Indian re/insurer, the program is deemed too large to only be covered domestically and so a bid process was run to secure coverage from global re/insurance players.
GIC Re said that as such mega-risks cannot be reinsured solely by Indian companies it was pleased to act as the lead, taking a 15% share of the premiums to be underwritten.
International re/insurers will provide the balance of the program for ONGC. For the previous years program the risk was distributed among 30 international players.
A GIC Re spokesperson said that the total premium for the program would be $12.62 million, with GIC Re set to take its 15% share of that.
The program will cover the ONGC upstream assets for a two-year term and its said that the premium has come down by over 7%, as the ONGC programs claims history has proven attractive to re/insurers and so competition for the bids was high.