GIC Re may have to pay Rs100cr for IOC's Jaipur fire claims

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GIC Re, the designated national reinsurer, has taken a hit of Rs 100 crore on account of the recent fire at the Indian Oil Corporation depot in Jaipur.

The IOC depot installation was insured for around Rs 230 crore by a consortium of insurers led by ICICI Lombard General Insurance.

IFFCO Tokio General Insurance, Oriental Insurance and National Insurance Company were the other insurers.

"Of the Rs 230 crore, GIC Re has reinsured around 30% of the cover. We will have to pay around Rs 69 crore as claims," said Yogesh Lohiya, Chairman and Managing Director, GIC Re.

Besides the main cover, IOC had also taken a statutory public liability cover for Rs 50 crore and additional third-party liability cover for Rs 100 crore. "We have reinsured around 20-25 per cent of both the statutory public liability cover and the additional third-party liability cover," he added.

He was speaking on the sidelines of an insurance summit organised by the National Insurance Academy.

Rethink on UK arm

The reinsurer, which was planning to set up a subsidiary in UK, is now having second thoughts.

"We are in a double mind. We might set up a subsidiary or enter into syndication in Lloyd's," said Lohiya.

Lloyd's is a British insurance market where multiple financial backers and underwriters come together to pool and spread risk.

The advantage of entering into syndication in Lloyd's is that the rating is taken care of, he added.

For GIC Re, around 39% of its total business comes from international operations. "We plan to increase it to 42% by the end of this financial year," said Lohiya.

The reinsurer, which is also the administrator of the terror pool, has paid around Rs 167 crore in claims to Hotel Taj Mahal and Hotel Trident. "The renovation work is still going on. We expect the total claims from both the hotels to be around Rs 500 crore," he said. The terror pool has a corpus of more than Rs 1,300 crore.

Taken from Business Line