GIC Re’s chiefasserts new IRDAI classification aimed at improving the corporate governance and risk mitigation practices

According to Devesh Srivastava, Chairman and MD of GIC Re, In the 50 years of our existence, we have in all but two years posted a loss – once in 2011 during Thailand floods and now in the first quarter FY21. A robust return on investments in India’s secondary market has always helped the reinsurer offset any losses on account of underwriting risks. In the first quarter of FY21, the company posted a loss of Rs. 557 crore, largely due to Rs. 1,700 crore worth of underwriting losses. “We do understand that the interest rate regime is only set to head south. The days of getting 10-15% returns on investments are well past us and now anything between 4-5% is a good return,” he said. “Following reinsurers from the West, (we are working) on a combined ratio of shift in our business and mindset, and treat investment income as an icing on the cake.” Srivastava, however, said the process would be time consuming for the public sector reinsurer set up in 1972. GIC Rs is now among the three insurance entities along with Life Insurance Corporation of India (LIC) and New India Assurance (NIA) to be classified as “systemically important” and “too big to fall.” Srivastava said that the new IRDAI classification aimed at improving the corporate governance and risk mitigation practices at large insurance entities would help the company continue to follow best industry practices.