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Business Standard
4 days ago
- Business
- Business Standard
GIC Re Dubai unit gets ₹90 cr VAT demand from UAE tax body, to seek review
The demand notice relates to discrepancies in VAT returns filed for January 2018 to December 2020, GIC Re said in a regulatory filing PTI New Delhi GIC Re on Saturday said its Dubai Branch has received a VAT demand notice of approximately Rs 90.42 crore from the Federal Tax Authority (FTA) of the United Arab Emirates. The VAT demand notice comprises United Arab Emirates Dirham (AED) 12,868,602.71 in net due tax and AED 25,966,807.36 in administrative penalties. The demand notice relates to discrepancies in VAT returns filed for January 2018 to December 2020, GIC Re said in a regulatory filing. GIC Re is currently reviewing the order in detail and intends to file a reconsideration request with the Authority within the statutory timeline, it said. There is no material impact on financials, operations or other activities of the Corporation due to the above-mentioned order, it said. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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Business Standard
25-06-2025
- Business
- Business Standard
Centre may speed up stake dilution in GIC Re, New India Assurance
The Union finance ministry is planning to dilute at least half of the required stake in general insurance companies such as New India Assurance Company and General Insurance Corporation of India (GIC Re) in 2025-26 (FY26) to ensure compliance with the minimum public shareholding (MPS) norms mandated by the Securities and Exchange Board of India (Sebi), according to a senior government official. As of now, the government holds 85.44 per cent in New India Assurance and 82.4 per cent in GIC Re. Sebi mandates all listed companies, including public sector insurers, to maintain a minimum of 25 per cent public shareholding under Rule 19A of the Securities Contracts (Regulation) Rules, 1957, and Regulation 38 of the Sebi (Listing Obligations and Disclosure Requirements) Regulations. This means the government has to dilute a 10.44 per cent stake in New India Assurance and 7.4 per cent in GIC Re. 'We are committed to meeting the MPS norms within the stipulated time frame. To achieve this, we plan to dilute stakes in a phased manner,' said the official. 'For instance, for GIC Re, the target is to dilute nearly 3.5 per cent, while for New India Assurance, we aim to offload about 5 per cent by the end of FY26.' The official said that in coordination with the insurance companies, the government will soon launch fresh roadshows to engage with potential investors. 'We are also expecting to receive some extension from the regulator in the case of GIC Re and New India Assurance, whose current deadline stands at August 2026,' the official added. 'Since the stake dilution will be carried out in tranches, we may need to pause between issues, depending on market appetite and conditions.' An email sent to the finance ministry remained unanswered until the time of going to press. The finance ministry had floated a request for proposal in February to dilute its equity in select public-sector banks and listed public financial institutions by inviting bids from merchant bankers and legal advisors. The Department of Investment and Public Asset Management Secretary Arunish Chawla told Business Standard in an interview last month that about a dozen merchant bankers have been approved for these financial transactions. Chawla had said that the government plans to divest a 6.5 per cent stake in Life Insurance Corporation (LIC) of India in tranches over the next 24 months. The Sebi has permitted LIC to raise its public stake to 10 per cent by May 16, 2027. The insurance behemoth was listed in May 2022 with a 3.5 per cent dilution of the government's stake. 'This year, you will see that we will follow a strategy of regular offers for sale in small tranches. We are officially giving forward guidance that small investors should look out for it,' Chawla said. While most central public sector enterprises have now met the MPS norm, Chawla said that a few sectors, such as defence, railways, and financials, are still left out. 'We are actively pursuing their disinvestment. Hopefully, within the next one year, we would like all of them to achieve MPS norms. That is critical because it helps create sufficient stock and float in the market. The pricing decision is better, and the market discipline on behalf of the enterprise is also improved,' he added.
Mint
18-06-2025
- Business
- Mint
Unfazed by new players, GIC Re gears up to reclaim market share
Mumbai: Encouraged by promising results in the previous fiscal year, General Insurance Corporation of India (GIC) Re is looking to take the fight to its private-sector and foreign rivals. The country's largest and oldest reinsurance company grew its non-obligatory business for the first time in four years. The reinsurer posted a net profit of ₹6,701 crore for FY25, higher than ₹6,497 crore in the previous year. Earned premium for the year stood at ₹36,130 crore compared to ₹33,576 crore in FY24. Combined ratio, a profitability metric that indicates whether an insurer is making an underwriting profit or loss, improved to 108.8% for FY25 from 111.8% in FY24. Ramaswamy Narayanan, the company's managing director and chief executive officer, is aiming to bring this to below 100% over the next 6-7 years. Underwriting loss for the year reduced 16.4% to ₹3,352 crore. In an interview with Mint, Naranayan said the company is unfazed by the entry of new private players and falling market share, and the focus is now on profitability and improving the combined ratio. 'Today, I have the capital and the solvency. Going forward, GIC will write big-ticket shares in areas where there is profitability, growth and which gives us diversification. You will not see us writing the same classes again. We will look for opportunities elsewhere and that is where I see the strength of this company." Also read | Reform push: Insurance amendment bill heads to Parliament; changes to IBC, Companies Act will have to wait Narayanan attributed the fall in the company's market share in the domestic market from 60% to below 50% over the past 3-4 years to the increased size of the sector, entry of new players and more business being written by other existing players at a time when GIC itself was de-growing. Even so, GIC Re continues to write a big share in India, he said. 'The phase of de-growth and consolidation is done," Narayanan said, adding that growth going forward would be with profit. Reinsurance is insurance for insurance companies--insurers transfer their risk to another company to reduce the likelihood of large payouts for a claim. Reinsurers allow insurers to remain solvent by recovering all or part of a claim payout. Obligatory business Despite increasing calls for cessation of the obligatory business to GIC Re, Narayanan is confident that even if the obligatory business component is removed, GIC Re will only see a short to medium term impact. His confidence stems from the other-than-obligatory business that the reinsurer does today, called 'voluntary quota shifts'. This includes insurers which may feel that just giving 4% of business to GIC is less and may want the company to write more. 'So even if this 4% goes, I will get it back in voluntary quotations. I have no issues there," he said. Under the obligatory business arrangement, all insurance companies in India are required to get 4% of their reinsured portfolio covered by GIC. In exchange, GIC gives a certain commission back to the insurance companies. 'Will it hurt GIC if the entire 4% goes in a stroke? We will have issues explaining that obviously. Rating agencies will start worrying about what the business mix is going to be and how is it going to work? But I think over a period of time we will easily get it back," he said. Read this | How the crash impacts Air India, insurers and Boeing Narayanan emphasised that GIC's obligatory business has continued to grow despite the mandated percentage being reduced over the years from 20% to now 4%, purely because the overall market is growing. Currently, the obligatory business accounts for around 30% of the reinsurer's revenue, which is expected to fall considering the business consolidation undertaken by the company during 2020-2024. 'We really cut off a lot of loss-making businesses. So at that time, the obligatory business grew but other segments de-grew," he said, adding that this share in revenue could fall to about 25% by next year. The eventual plan is for the obligatory business to account for 25% of the business, international business for another 25% and balance 50% is the domestic business. Diversification Part of the growth strategy is also expanding the international business in order to diversify geographical risk for the reinsurer, especially for 'natcat' or natural calamities-related and political risk-related losses. This is done through sophisticated models to optimise capital management, Narayanan said, adding that while markets like the US may see more such incidents, the pricing is much better there compared with India, making it much easier to recoup losses. 'That is somewhere we have to improve because India is catching up in terms of the frequency and severity of incidents. And unfortunately, while climate change is a reality, a lot of these losses in India are due to how we manage our cities and how they are growing," he said. In October 2024, global rating agency AM Best upgraded GIC Re's credit rating to 'A-' from 'B++'. Beginning of calendar year 2025, the company started growing the international business. The reinsurer currently has overseas branches in Malaysia, South Africa and a subsidiary in the Lloyds marketplace in UK. Also read | LIC to decide on health insurer stake purchase in 2-3 months The second leg of diversification is being done through expansion into new product lines with the reinsurer now looking to write more health and motor insurance business—the two fastest growing segments within general insurance. 'We were pretty underweight on health. So we spoke to a lot of companies and we saw areas that could be of interest to us," Narayanan said. Competition Narayanan said he is not worried by the entry of private players into the market as he believes that GIC Re has always been a global player and its competitors multinational reinsurers and not domestic insurance companies. This includes Irdai awarding the reinsurance licence to Valuattics Reinsurance—marking the entry of the first private reinsurer to operate from within India. Narayanan believes the regulator could be open to awarding more such licences. "The point is, reinsurance is more capital hungry. So companies with deep pockets will need to come in. If they apply, I'm sure they will get it because Irdai wants more players to come into the market," he said, adding that it should not impact GIC's business because every company has their own way of getting business. While there is no shortage of business in India, a bigger issue is that India is perceived to be a very cheap market due to low pricing. 'Our competitors have always been, and even today, are multinational companies. I'm not competing with New India Assurance or Life Insurance Corporation. I'm really working with them and competing with Munich Re and Swiss Re and Hanoi," he said. In the face of this competition, what is expected to hold GIC in good stead is its long-standing partnerships that it has built over decades, he said. Also read | Third-party vehicle insurance: Insurers in distress over three-year rate pause 'GIC's relationships are more institutional. It's not about one person, but about the kind of support that we can give as an institution," Narayanan said, adding that as such, GIC does not work like a 'typical PSU" as it doesn't have too many offices or people and is a very lean organization. GIC Re currently has around 458 employees including recent recruitment of 80-85 people. HR overhaul Acknowledging the constraints that come with being a state-owned entity, Narayanan believes that GIC Re is trying to do things 'very differently". Hiring and human resource management is a key agenda for the organisation going ahead with Narayanan saying that while the reinsurer might not always be able to match its competitors' salaries, it is trying to offer value to employees in terms of work opportunities, differentiated training and learning across various lines of business as employees grow within the organisation. The objective is also to ready a second line of managers to take over the senior's role in case of exits or transfers. A lot of these HR-related changes are part of 'Project Parivartan'–introduced in 2022 and being spearheaded by KPMG, which GIC Re has hired as an external consultant to advise on the overhaul of its HR practices. The mandate for KPMG is to review existing HR practices and suggest global practices that can work within the PSU structure and factoring in the expertise required for this niche business. 'We have tried to see how we can restructure, also in terms of reducing hierarchy and red tape and creating clarity in what employees are doing and their role," he said. And read | Budget 2025: Insurers seek support for tax incentives, health cover, higher FDI limit
New Indian Express
17-06-2025
- Business
- New Indian Express
AI 171 Crash: $475 million insurance claim ranks among India's costliest
CHENNAI: India's non-life insurance major, General Insurance Corporation of India (GIC Re), estimates that total insurance claims related to the June 12 crash of Air India Flight AI 171, a Boeing 787-8 Dreamliner, could reach up to $475 million (approximately ₹39.4 billion), making it one of the country's costliest insurance claims. The Ahmedabad-to-London flight, carrying 242 individuals—230 passengers and 12 crew members—tragically crashed shortly after taking off from Sardar Vallabhbhai Patel International Airport in Ahmedabad. Total claims for the Air India crash could reach $475 million, driven primarily by liability payouts, which are expected to exceed the aircraft's value by more than 2.5 times, GIC Re stated on Tuesday. In rupee terms, this translates to approximately ₹4,091 crore (based on current exchange rates). "The way we see it, the hull (the aircraft) will be around $125 million, and liability claims—on account of passenger liability, third-party liability, and other personal accident and travel policies—should amount to approximately $350 million," said GIC Re Chairman and Managing Director Ramaswami Narayanan. Only one passenger, British national Vishwash Kumar Ramesh, survived the crash. Additionally, at least 38 people on the ground were killed when the aircraft struck a medical college hostel in the Meghani Nagar area. The incident marks the first fatal crash involving a Boeing 787-8 Dreamliner and the deadliest aviation accident globally in a decade, according to aviation industry portal AviationA2Z.
Time of India
17-06-2025
- Business
- Time of India
Air India plane crash: Claims could reach $475 million, says GIC Re
Air India crash (Photo: AP) Total claims from the Air India crash in Ahmedabad could touch $475 million, driven by liability payouts that are expected to be over 2.5 times the aircraft value, said Ramaswamy Narayanan, chairman and managing director of GIC Re. In rupee terms, the claims could exceed Rs 4,000 crore. "The way we see it, the hull will be around $125 million and the liability claims on account of passenger liability, third-party liability and other PA and travel policies in vogue should work out to $350 million," said Narayanan. Although GIC Re is not a direct insurer, it has exposure to the Air India fleet through reinsurance. As the national reinsurer, it also bears part of the loss incurred by every domestic non-life company, which is mandated to cede a portion of the risks it underwrites.
