Kathmandu. Indian reinsurer GIC Re is expected to incur an additional financial burden of $25 million due to the devastating wildfires in the US state of Los Angeles. The fires, which have devastated the California economy, have cost global reinsurers up to $50 billion.
GIC Re, one of the major players in the global aviation reinsurance market, has provided $7 million for the recent crash of an American Airlines passenger jet near Washington and a smaller amount for a plane crash in South Korea that killed 179 people. For both losses, American Airlines and South Korean-owned GIC, the third-largest Asian reinsurer, have a very small share.
“We have a small exposure to the Los Angeles fires. It’s not huge. Currently, we have provisioned for about $25 million. Although it was originally an event, which happened in the fourth quarter of January. But prudently, we have already provided for it in our third quarter results.”
“We are one of the largest aviation underwriters in the world. The ratings have been upgraded, we will definitely see more business in the future. The advantage is that, if you look at it, aviation reinsurance is a very claims-free type of class, the safety factors are very high. “However, there can be losses here,” he explained.
Ramaswamy said that GIC Re, the 10th largest global reinsurer, has increased its international business during the recent January 1 renewal.
“We received offers of about 25 to 26 percent additional business underwriting.” But what we saw was that there was a lot of capacity available in the market. There was a lot of interest from reinsurers. So, to that extent, we did not accept all the business writing that was offered. So, we ultimately accepted only about 15 to 16 percent. That means on January 1, we have written about $80 million more.”
International business has increased GIC’s business in the first nine months of the current fiscal year. Reinsurance premiums contributed about 23 percent of income for GIC Re.
According to Ramaswamy, the global reinsurance market was very scope-based at the time of the January 1 renewal. In the coming years 2025 and 2026, GIC Re will see higher premiums in the international market, Ramaswamy predicted.
