GIC Bhutan Re Ltd, the first reinsurance company of Bhutan celebrated its first anniversary on the 5th of this month. A ceremony was held to mark this occasion at Hotel Taj Tashi, Thimphu which was graced among others by Mr Lyonpo Damchoe Dorji, Home Minister of Bhutan, Shri G S Sandhu, Secretary, Department of Financial Services (DFS), Ministry of Finance, Government of India, and Mr Dasho Lam Dorji Finance Secretary- Royal Govt. of Bhutan. This is an example of the cooperation between the two neighbours to improve the levels of financial inclusion in the respective countries.

The Indian Prime Minister, Shri Narendra Modi chose Bhutan as his first port of call soon after taking over as Prime Minister of India. In his statement at Thimphu, Shri Modi emphasised the importance of further developing and strengthening bilateral relations between India and its neighbours.

In this direction, the Department of Financial Services (DFS), Ministry of Finance, Government of India has already taken two major steps in the form of Druk PNB JV and GIC Bhutan Re, the two joint ventures that are already up and running.

The Department of Financial Services, Government of India and GIC Re in keeping with the above thoughts, utilized the first anniversary of the joint venture Reinsurance Company as a symbol of their commitment to the call of the Prime Minister Shri Modi to develop bilateral relations in all spheres including financial sector. The importance that the Government of India attaches to this policy of strengthening its bilateral relations with its neighbours is borne out by the fact that Secretary, Department of Financial Services, Government of India, Shri G S Sandhu was himself present at the First anniversary celebrations of GIC Bhutan Re Ltd.

Shri Ashok Kumar Roy, Chairman-cum-Managing Director GIC Re stated that GIC Re is one of the major reinsurer on the global horizon with Standard & Poor’s Ranking of 15th. It operates through its JV in Bhutan, a fully owned subsidiary in South Africa, branch offices in London, Dubai, Kuala Lumpur and representative office in Moscow.

The Reinsurance JV is a symbol of our commitment towards developing the financial and economic relationship amongst the neighbouring countries. More investment by India would enhance its risk appetite to retain larger risks within the country thereby conserving valuable foreign exchange. The Company is also accepting inward reinsurance from global market thereby bringing much needed foreign exchange to Bhutan. Gradually as the company grows the retention capacity as well as flow of business from overseas will grow.

Bhutan and India share many things in common, historically, geographically and socially, we also face similar natural risks. Last but not the least we also share the SAARC platform. The SAARC nations are home to more than 23 per cent of the global population.

SAARC countries share a unique relationship with each other. Our economies are basically agriculture based. Our societies, our social problems, our governance structure have wide similarities. And these similarities do not end here. The kind of natural risks that we face are also common. Whether it is India, Bangladesh, Nepal or Pakistan, we have the perennial problem of floods, landslides and earthquakes. All our countries are in a transitory phase and these catastrophe events put our growth and development several steps back. The things are aggravated by global warming and climate change and we are feeling the effects of these in very many more ways.

Hence, the only way forward is to stand together, gain from each other’s experience, share our resources and expertise for the benefit of our societies that share a common heritage.

SAARC countries as a region are highly under insured region. With the kind of development that we are witnessing the potential for growth of insurance industry in this region is immense. None of the SAARC countries either individually or collectively measure up to an optimum level of insurance penetration. We have a long distance to cover in that direction, and this if done jointly would give the best results to each SAARC member country.

In fact there is potential for more cooperation amongst the SAARC countries for managing their catastrophic risks efficiently. We need to work together and India shall play a pivotal role in our pursuit to manage risks better. The Indian Reinsurer has from the very beginning been instrumental in promoting regional support and cooperation in the insurance sector.

Bilateral financial cooperation via reinsurance joint ventures strengthens risk retention and regional catastrophe risk management between neighbours. The first anniversary of GIC Bhutan Re Ltd illustrates bilateral financial cooperation through joint ventures (Druk PNB JV and GIC Bhutan Re) established by the Department of Financial Services, Government of India to deepen financial inclusion, expand domestic risk retention, attract inward reinsurance and bring foreign exchange to Bhutan, while promoting regional cooperation for catastrophe risk management among underinsured SAARC nations.