News
New capital drives ill-discipline T
he growing influx of alternative capital into the market is intensifying the threat of
a market-wide loss in underwriting discipline. That is the opinion of Alice Vaidyan, general
manager of Indian reinsurer GIC Re, who said that the growing emergence of alternative capital, which is eroding the pricing power of reinsurers, is interlinked with pricing discipline. “Reinsurers need to meet these two threats
and also look at opportunities, be it big data, new products or new geographies,” she said. She added that GIC Re has observed soft pricing across all lines and customers demanding more
solutions from reinsurers. Vaidyan said: “Consequently, GIC Re is
looking at structured solutions for our clients to create the maximum value for both of us. Also, we want to be closer to our clients and hence we will be increasing our presence across geographies in a phased manner.”
publi_mapfrere_260X170_04-14.ai 1 30/04/14 11:01 Earlier this year, the company acquired
South African reinsurer Saxum Re, which now operates as GIC Re South Africa, in its first overseas transaction. The reinsurer is now looking for opportunities to build a presence in the Lloyd’s market and the US. In May this year the reinsurer confirmed
specialised and targeted
that it is actively evaluating the feasibility of issuance of catastrophe bonds. A spokesperson for the company said that the bonds would help GIC Re save on its reinsurance costs. “Our Vision 2020 aims at placing GIC Re among the top 10 global reinsurers. For this to happen we need to expand overseas, both organically and inorganically,” said Vaidyan. According to Vaidyan, pressure in
established markets is forcing firms to look to the East, with India being the next big market. Vaidyan added: “Moreover, once the foreign
direct investment limit (FDI) is enhanced, we should see many more reinsurers operating
Alice Vaidyan
out of here. So to ensure that we maintain our growth trajectory, we need to expand overseas.” She explained that GIC Re has been supporting and strengthening the
Indian
insurance market for over 40 years and has diversified across product lines and geographies to emerge as a leader in the South Asian Association for Regional Cooperation (SAARC) and Afro- Asian markets. Vaidyan expects the reinsurer to retain its leadership role in the region. n
21.10.14 TUESDAY
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