Indian state-owned General Insurance Corporation (GIC Re) has announced ambitious plans to diversify its revenue base into the life segment and expand business lines throughout the global market, in a red herring prospectus.
The firm recently filed an Initial Public Offering (IPO) constituting 14.22% of the firm’s post-offer paid-up equity share capital, the offering is expected to come to market around October or November 2017, and could raise upwards of $1 billion to help fund GIC Re growth.
As part of the new risk diversification strategy, GIC Re plans to expand into life insurance and grow its domestic health and liability businesses and overseas fire (property), space and cyber security lines.
Currently, non-life insurance business accounts for approximately 95% of the firm’s total premium ceded in Fiscal 2017, however, the carrier aims to rebalance its underwriting lines through moving into the underexplored life segment.
“We believe that the Indian life insurance market offers a growth opportunity for us due to its high growth rate primarily driven by low penetration levels. We intend to market reinsurance of life products to all participants in Indian life insurance market.
“In particular, we are looking to create customized products for domestic life insurance companies to expand our business,” GIC Re said in the prospectus.
The firm also aims to move into the international life reinsurance segment through building on overseas relationships in SAARC, South East Asia, Latin America, Africa and China.
In Fiscal 2017, GIC Re’s overseas reinsurance underwriting represented 30.53% of its total gross premiums on a restated consolidated basis – the firm now aims to “achieve a balance of international and India business in terms of premiums” with ambitious international growth plans.
GIC Re’s ambitious international growth plans include establishing a Lloyd’s of London syndicate, accepting more U.S. insurance related risks, setting up offices in China, Brazil, and Bangladesh, and expanding Latin America business.
The carrier also hopes to convert its Moscow office into a subsidiary and build a strategic relationship for business in Myanmar.
The IPO listing signals a recognition of the need for international capital influx and diversification to achieve expansion plans and to be in a stronger position to service the government’s insurance schemes to safeguard and catalyse the country’s booming economic growth.
