N Ramaswamy, CMD, GIC Re

One of the outstanding features of GIC Re’s performance during the last quarter was its feat of improving its combined ratio significantly to 107.83 per cent in Q3FY 25 from 120.47 per cent in the year-ago period

“We remain focused on reducing our combined ratio. This progress is supported by our ongoing efforts to enhance the quality of our portfolio through prudent risk selection, weeding out unprofitable lines and focusing on business that positively contribute to our bottom line,” said N Ramaswamy, CMD, GIC Re

Mumbai: With a much improved combined ratio of 107.83 per cent and substantial reduction in its underwriting losses, state owned GIC Re has seen its net profit rising by seven per cent to Rs1621 crore in the third quarter ending in Dec, 2024.

GIC Re, the 10^th largest global reinsurer(AM Best ranking), has increased its premium by 14 per cent year-on-year (Y-O-Y) to Rs 9,967 crore in the reporting quarter and its underwriting losses have fallen by almost 62 per cent to Rs 582.39 crore during the quarter.

Analysts said one of the outstanding features of GIC Re’s performance during the last quarter was its feat of improving its combined ratio significantly to 107.83 per cent in Q3FY 25 from 120.47 per cent in the corresponding period of the previous fiscal.

The reinsurer, with a 51 per cent of domestic market share, competes with a dozen of foreign reinsurance branches(FRBs) in the country set up by some of the large reinsurance multinationals like Munich Re, Swiss Re, Lloyd’s, Scor, Hannover Re and 300 cross boarder reinsures(CBRs), providing cheaper reinsurance covers from overseas markets and generating a total premium of of around Rs 1 trillion.

The combined ratio is a key performance indicator  used by re/insurance companies to assess their financial health and profitability. It’s calculated by dividing the sum of an insurance company’s losses and expenses by the amount of premiums it earned.

“While our reinsurance business has faced challenges, particularly as we navigate the realities of climate change with more frequent and severe events, we remain focused on reducing our combined ratio. This progress is supported by our ongoing efforts to enhance the quality of our portfolio through prudent risk selection, weeding out unprofitable lines and focusing on business that positively contribute to our bottom line,” said N Ramaswamy, CMD, GIC Re.

“Our disciplined approach, combined with the continuous growth in the domestic market, positions us well for sustainable success. We believe that the strategic steps we are taking will drive long-term stability and enhance shareholder value, reflecting our commitment to a balanced high-quality reinsurance portfolio,” added Ramaswamy.

However, the investment income of the reinsurer has declined by 22 per cent (y-o-y)from Rs 3,361 crore in Q3FY24 to Rs 2,627 crore in Q3FY25.

The reinsurer’s Expenses of Management(EoM) has fallen to 0.9 per cent(of premium) in Oct-Dec quarter of FY 25 from 1.3 per cent in the corresponding quarter of FY24.

GIC Re’s Solvency Ratio was at 3.52 as on 31 Dec,2024 compared to 2.94 as on Dec , 2023.

The company’s total assets are at Rs l,88,953.20 crore by the end of Dec, 24 compared  to Rs  1,74,882.51 crore in Dec, 23.

GIC Re has expanded its Fire , Health and Life portfolios while shrinking its Crop, Motor and Marine business during first nine months of the current fiscal.

With Fire as the largest portfolio, the reinsurer has aggressively increased its Health portfolio by 87 per cent to Rs 6,988 crore during Apr-Dec period of the current fiscal.