GIC Perestrakhovanie LLC, Russia, a wholly owned subsidiary of India’s General Insurance Corporation of India (GIC Re), has now received a reinsurance licence from the Central Bank of Russia (CBR).
The approval means that GIC Re is the first reinsurance firm in more than 10 years to be granted this licence, and the firm has plans to start operations soon.
It was reported last year that GIC Re could be moving to open a subsidiary in Russia as the firm looks to increase the volume of foreign business it writes.
The approval from the CBR enables the reinsurance subsidiary to start all activities and provides the Indian firm with diversification benefits and an expanded geographical footprint.
Chief Executive Officer (CEO) of GIC Perestrakhovanie, Sanjay Mokashi, commented: “The market offers encouraging long-term growth for the reinsurance business as it is characterised by low rate of insurance penetration. The overall level of insurance penetration in Russia’s GDP is very low.”
From its Moscow office, the reinsurer also has plans to provide services for the former Soviet Union and Commonwealth of Independent States countries.
The reinsurer has a long-term goal to maintain a 50:50 split in foreign and domestic underwriting. Following the receipt of its Russian licence, it remains to be seen where and when the reinsurer will expand in the Latin America markets, with Brazil previously being touted as an ideal location.