GIC IPO: Information Analysis

Note: This article has no recommendation to either buy or avoid this IPO. Instead, we have presented all the relevant information based on which you can make your own decision. What is reinsurance Reinsurance is secondary insurance. An existing insurer 'cedes' the premium on a policy it has written and also passes the risk on to the reinsurer. Non-life insurers in India are obliged by the IRDA to cede at least 5% of their policies to a reinsurer. Background GIC or General Insurance Corporation of India was incorporated in 1972 as a general insurer and converted itself to a reinsurer (exclusively) in 2000. It is India's largest reinsurance company in terms of gross premiums and accounts for 60% of the premium ceded to reinsurers.30% of its gross premiums were connected to risks outside India. GIC makes money by collecting premiums and investing them in various assets. It is an efficient operation with a return on equity of 16%. This was above 15% in both 2016 and 2015. GIC's Indian assets (the bulk of its portf