GIC Re wins bid to lead ONGC offshore package policy

General Insurance Corporation of India (GIC Re) has won the international bidding process and will lead the reinsurance of Oil & Natural Gas Corporation’s Offshore Package Policy program 2018-20.

The programme extends comprehensive coverage to upstream offshore assets valued at more than USD 40 billion.  Over the years, GIC Re has been leading the offshore energy package of ONGC and the lead has been followed and supported by international reinsurers. These types of mega risks cannot be fully absorbed in the domestic risk market alone and require placements in international markets for better spread of risk.

In a statement, GIC Re said that the ONGC programme with its attractive claims history did witness competition in this international bid which saw premium come down in high single-digit percentage terms. ONGC is the largest offshore exploration and production company in India.

Mega risk reinsurance follows international norms in coverage, and pricing is an outcome of global capacity supply for such risks. Local competitive factors and market cycles do not apply to risks which require reinsurance capacity from across the globe.

Reinsurance refers to a process where an insurance company takes a cover to protect themselves against heavy claims for mega risks like oil projects, engineering projects and large government sponsored schemes.