GIC Re stands for General Insurance Corporation of India Limited, an Indian government-owned reinsurance company. GIC Re’s registered office and headquarters are both located in Mumbai. It was the only reinsurance company operating in the Indian insurance market until late 2016 when the market was opened to foreign reinsurance companies from Germany, Switzerland, and France. GIC Re’s shares are traded on the Bombay Stock Exchange and the National Stock Exchange of India.
History of GIC Re
The business of general insurance was nationalized through The General Insurance (Emergency) Provisions Ordinance promulgated on 13 May 1971 and thereby the business being carried on by 107 entities was consolidated and restructured into four companies namely The New India Assurance Company Limited, Bombay, United India Fire & General Insurance Company Limited, Madras, Oriental Fire & General Insurance Company Limited, Bombay and National Insurance Company Limited, Calcutta (New India Assurance Co. Ltd., United India Insurance Co. Ltd., The Oriental Insurance Co. Ltd., and National Insurance Company Co. Ltd. respectively).
General Insurance Corporation of India (GIC) was formed in pursuance of Section 9(1) of GIBNA. It was incorporated on November 22 1972 under the Companies Act, 1956 as a private company limited by shares. GIC was formed to superintend, control, and carry on the business of general insurance.
The first Chairman of GIC was A Rajagopalan, an Actuary, and an officer of the Indian Administrative Service (IAS). M K Venkateshan and S K Desai were appointed the two Managing Directors of GIC.
GIC was designated as a reinsurer under Section 101 A of the Insurance Act of 1938 on January 1, 1973, making it the Indian reinsurer for receiving mandatory cessions, a role previously held by two companies, India Reinsurance Corporation Limited (India Re) and Indian Guarantee and General Insurance Company Limited (Indian Guarantee).
In November of 2000, GIC was reborn as a pure reinsurance company. Under the Insurance Act of 1938, it was re-notified as an “Indian reinsurer,” and it continued to receive mandatory cessions from direct insurers. From April 1, 2002, it continued to write foreign inward reinsurance business solely on its account.
The four subsidiaries were delinked from GIC by an administrative order from the Ministry of Finance on March 21, 2003, and became directly owned by the Government.
The company changed its name to “GIC Re” to reflect its new identity.
At the time of its creation, GIC was headquartered on the fourth floor of the Industrial Assurance Building owned by LIC. GIC acquired Jeevan Kendra that belonged to LIC and housed its Bombay Zonal Office. It was extensively renovated retaining its curved front and then gilded with panels of reflective glass. It has a circular atrium running the height of the building. This building was eventually named ‘Suraksha,’ meaning protection.
Suraksha became the Registered and Head Office of GIC, and all its departments moved in from their various locations in March 1992.
Motto & Logo of GIC Re
On 26 August 1976, Chairman A Rajagopalan in GIC’s Board Minutes signed and approved the motto of GIC Re, Ãpatkãle Rakshisyãmi. It a Sanskrit phrase that translates into, “I shall protect you in times of distress.” In the 1980s, GIC’s logo was modified and the motto was incorporated in Devanagari Script.
Subsidiaries of GIC Re
- GIC Re South Africa Ltd
GIC Re South Africa Ltd is a 100% owned subsidiary of GIC Re. It was established by acquiring South African composite reinsurer Saxum Re in 2014 to cater to the Reinsurance needs of the Africa continent, especially South Africa. The company underwrites business from the entire African continent except for Egypt and Libya.
- GIC Perestrakhovanie LLC, Russia
GIC Perestrakhovanie LLC, Russia is a 100% subsidiary of GIC Re which was established on 14 November 2018 and was licensed on 30.01.2020 to transact reinsurance business. The remit of the subsidiary is to write business in all classes of reinsurance emanating from Russia and former Soviet Union countries, namely, Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine, Uzbekistan.
- GIC Re, India, Corporate Member Ltd
As part of its global business outlook, GIC Re has been providing capacity to Lloyd’s syndicates through quota share capital gearing treaties since 2011. As a capacity provider, since GIC Re was required to have its Corporate Membership at Lloyd’s, GIC Re acquired I-CAT CCM TEN Ltd, an existing Corporate Member company, in December 2013 and renamed it as GIC Re, India, Corporate Member Ltd, which is registered as a private limited company in the UK and 100% owned subsidiary of GIC Re. The acquisition has the approval of the Ministry and IRDA.
- GIC Housing Finance
GIC Housing Finance Limited was incorporated as ‘GIC Grih Vitta Limited’ on 12 December 1989. The name was changed to its present name vide a fresh Certificate of Incorporation issued on November 16, 1993. The primary business of GICHFL is granting housing loans to individuals and persons/entities engaged in the construction of houses/flats for residential purposes.
The Company is promoted by General Insurance Corporation of India and its erstwhile subsidiaries namely, National Insurance Company Limited, The New India Assurance Company Limited, The Oriental Insurance Company Limited, and United India Insurance Company Limited.
Board of Directors
GIC Re’s Board of Director consists of Mr. Devesh Srivastava (Chairman-and-Managing Director), Mr. A K Das (MD and CEO, BOI), Mr. V Ramasamy (Independent Director), Mr. Amarendra Pratap Singh (Independent Director), Mr. G B Pande (Independent Director), Ms. Dakshita Das (Additional Secretary, DFS), and Ms. A Manimekhalai (Executive Director, Canara Bank).
Executives of GIC Re
Mr. Devesh Srivastava is the currently appointed Chairman- and- Managing Director of GIC Re. GIC Re’s various lines of business are headed by the General Managers namely Ms. Reena Bhatnagar, Mr. Deepak Prasad, Ms. Madhulika Bhaskar, Mr. Sashikant More, Ms. Suchita Gupta, and Mr. S L Tripathy.
As of March 2020, there are 568 employees in GIC Re (including liaison offices and foreign branches). Out of these, 198 are female employees.
Key Differences Between Life Insurance and General Insurance
The difference between life insurance and general insurance can be drawn clearly on the following grounds:
- The insurance contract, in which the lifetime risk of an individual is covered, is known as life insurance. As opposed, the insurance, which is not covered under life insurance and includes various types of insurance, i.e. fire, marine, motor, etc. is general insurance.
- Life insurance is nothing but an investment avenue. On the contrary, general insurance is a contract of indemnity.
- Life insurance is a long-term contract, which runs over a number of years. Conversely, general insurance is a short-term contract, which needs to be renewed every year.
- In life insurance, the sum assured is paid, either on the happening of the event or the maturity of the term. As against this, in general insurance, the amount of actual loss is reimbursed, or liability incurred will be repaid on the happening of an uncertain event.
- In life insurance, the premium is paid throughout the life of the term. In contrast, in general insurance, a one-shot payment of premium is made.
- In life insurance, the insurable interest must be present only at the time of the contract, but in general insurance, the insurable interest must be present, both at the time of contract and at the time of loss.
- Life insurance can be done for any value based on the premium the policyholder is willing to pay. Unlike, general insurance the sum payable is confined to the amount of loss suffered, regardless of the policy amount.
- The component of saving is normally present in life insurance but not in general insurance.
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