Insurance provides much needed support to industrial development of a country, both as a financial intermediary and a provider of risk transfer and indemnification. It contributes to economic growth by allowing different risks to be managed more efficiently. Bhutan too is slowly developing its insurance sector. Upto 2009 Bhutan had just one insurance company, The Royal Insurance Corp of Bhutan Ltd (RICB). In July 2009, a new player, Bhutan Insurance Ltd, entered this once exclusive insurance market of RICB.
To strengthen the Bhutanese insurance sector and bring it at par with the economic development in the country, the Royal Monetary Authority (RMA), Bhutan decided to license a reinsurance company in Bhutan. The thought behind this was to retain the premium income within the Country and to build the Capacity of the Bhutanese insurance sector. This is also expected to usher in development of underwriting skills and pricing correction, besides creation of employment and development of the financial sector.
GIC Re has entered into this joint venture in view of India’s relationship with Bhutan and in the spirit of SAARC. GIC Re also believes in the spirit of regional cooperation and is always ready to offer its technical and professional expertise and also provide support in the areas of Human Resource and Information technology. Plans are underway to get this maiden Bhutanese reinsurance company operational by September 2012.
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