GIC Re, as part of restructuring its global business to be more profitable by pruning loss making business, has reduced its gross premium income by 13 per cent to Rs 32,904.65 crore in the first nine months Fy2021-22
The reinsurer’s combined ratio(CR) was higher at 122.58 per cent during the Apr-Dec period as against 114.02 % in the year-ago period. GIC Re’s underwriting losses rose by 31 per cent to Rs 6,580.30 crore in reporting period as compared to Rs 4,953.35 crore in the year-ago period
Mumbai:
Higher claims and reduction of gross premium have pulled down the net profit of state owned reinsurer GIC Re by 150 per cent to Rs 210.34 crore in the first nine months ending in Dec as compared to profit after tax of Rs 660.0 crore in the year-ago period.
GIC Re, as part of restructuring its global business to be more profitable by shedding loss making business, has reduced its gross premium income by 13 per cent to Rs 32,904.65 crore for the first nine months of the fiscal as compared to Rs 38,201.56 crore in the corresponding period of the previous year.
The 14th largest global reinsurer has cut down its exposures in all portfolios except, Motor, and Life. It has mopped up its 68 per cent of its premium from domestic market while the rest are from international markets during the period.
It has cut down its Health portfolio by almost 30 per cent to Rs 3,021 crore while its Agriculture portfolio has further shrunk by 17 per cent to Rs 7,277 crore during Apr-Dec period.
The reinsurer’s combined ratio(CR) was higher at 122.58 per cent during the reporting period as against 114.02 per cent in the year-ago period. Adjusted CR of the company is at 104.62 per cent in Apr-Dec period as against 98.82 per cent in the year-ago period.
The reinsurer’s domestic CR at 114 per cent(111 per cent) appeared to be relatively under control while CR of international business is much higher at 139 per cent(119 pe cent) during the period.
Any CR of over 100 per cent indicate payment more claims by re/insurer than the premiums earned during the period..
GIC Re’s underwriting losses rose by 31 per cent to Rs 6,580.30 crore Apr-Dec period as compared to Rs 4,953.35 crore in the year-ago period. It paid claims amounting to Rs 32,291 crore durig the period as against Rs 30,651 crore in the year-ago period.
The reinsurer’s global claim chart is topped by portfolios like Fire, followed by Agriculture, Motor, Health, and Life during the nine months ending December, 2021.
However, in the in the domestic market Agriculture portfolio, which has contributed the maximum premium in the GIC Re’s kitty, has been paid the largest amount of claims.
The company recorded a loss before tax of Rs 54.63 crore for nine months ended Dec 31,2021 as compared to PBT of Rs 1,117.90 crore in the corresponding period of the last fiscal.
However, the reinsurer’s investment income has gone up marginally to Rs 6,735.70 crore in Apr-Dec period as compared to Rs 6,534.65 crore in the corresponding period of the previous fiscal. Its Solvency Ratio ofthe reinsurer is pegged higher at 1.80 at the end of nine months as compared to 1.53 as on March 31 2020.
Similarly total assets of the reinsurer at ₹ 1,47,275.37 crore as on Dec 31,2021 has surged by 10 per cent to over Rs 1,33,931.04 crore recorded as on Dec 31, 2020..
Net Worth of the company (without fair value change account) recorded at Rs 22,605.36 crore on Dec 31,2021 as against Rs 21,204.05 crore as on Dec 31, 2020. Net worth of the company (including fair value change account) recorded as Rs 53,723.15 crore on Dec 31.2021 as against Rs 45,952.21 crore as on Dec 31,2020.
Quater on quater
GIC Re reported a net loss of Rs 28.48 crore in the quarter ended December 2021, due to higher underwriting losses.
The general insurer had posted a net profit of Rs 987.42 crore in the year-ago quarter. Sequentially, there was a net profit of Rs 1,010.55 crore in the September 2021 quarter.
The gross premium earned by the company in October-December 2021 fell to Rs 10,240 crore as against Rs 11,668.51 crore earned in the year-ago period.
The underwriting losses during the quarter stood at Rs 2,371.19 crore, against a loss of Rs 1,022.64 crore in the year-ago period.
The claims incurred during October-December 2021 rose to Rs 10,857.83 crore, against Rs 8,192.95 crore.
For the nine months ended December 31, the company’s consolidated gross premium income fell to Rs 33,503.07 crore, compared with Rs 38,577.84 crore during the nine months ended December 2020.
The consolidated net profit during April-December 2021 fell to Rs 450.26 crore from Rs 662.72 crore in the year-ago period. The underwriting losses ballooned to Rs 6,609 crore, against Rs 4,935 crore a year ago.
The leader of the Indian reinsurance market has overseas operations in the Afro-Asian region covering the Middle East and North Africa and SAARC countries in Asia. It also has branches in London and Kuala Lumpur.
Shares of the company on Thursday closed 1.89 per cent up to Rs 139.90 apiece on the BSE.
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