Despite having higher premiums and investment income, state owned GIC Re on Thursday reported a 19.7 per cent fall in its net profit at Rs 603.37 crore in the last quarter of the fiscal ended March 2019,due to higher tax provisioning.The insurer had registered a net profit of Rs 751.60 crore in January-March quarter of 2017-18.
The company's profit after tax (net profit) for the year ended March 31, 2019 fell 31.2 per cent to Rs 2,224.30 crore from Rs 3,233.58 crore in the previous year, mainly due to increase in tax provisions on account of change in law, it said in a regulatory filing.
“Due to change of tax laws, which are now applicable only to the domestic general insurance industry, we had to pay higher taxes on our investment income. We are talking to the government on this issue and expect some relief,'' said Alice Vaidyan, CMD, GIC Re on Friday while announcing the results of the company.
“The board has recommended a dividend of Rs 6.75 per equity share for the financial year 2018-19, subject to approval of the members at the ensuing 47th annual general meeting.
Gross premium collection during March quarter stood at Rs 8,089.35 crore as against Rs 8,525.02 crore in the year-ago period.
Gross premium during the year rose to Rs 44,238 crore, up six per cent in 2018-19, over Rs 41,799.37 crore in 2017-18.The company, with market share of 65 per cent in the Indian reinsurance market, that has now another 10 global reinsures having their branchesin the country, has gathered 71.32 per cent of its business from the domestic market and the rest from the international markets.
“Going forward, we will be more focussing on the growth of bottomline rather than topline. We want to increase our profitability. We have reduced our exposure to crop reinsurance which has now fallen from 45 per cent to 30 per cent in a matter of two years,'' said Vaidyan.
Combined ratio of the company improved to 105.9 per cent for 2018-19 from 107.6 per cent in the year ago period.There is an improvement in underwriting results quarter ended in Mar 2019, showing underwriting profit of Rs 101.16 crore.
“The combined ratio has remianed high for us as we had to pay large claims for a number of overseas catastrophe and Indian natural disasters like Kerala floods.We would like to bring down our combined ratio to 100 per cent within a year,'' said Vaidyan.
However, GIC Re's incured claims ratio improved to 89.5 per cent during 2018-19 as compared to 91.8 per cent in 2017-18.
GIC's Re's investment income for the fiscal increased 18.7 per cent to Rs 6,401.34 crore from Rs 5,392.03 crore in 2017-18.
The company's commissions reduced to 15.7 per cent on net premium from 16.9 per cent in 2017-18.
GIC Re's consolidated net profit for 2018-19 was at Rs 2,757.57 crore as compared with Rs 3,145.54 crore in the previous year.
Consolidated gross premium grew 7.9 per cent to Rs 45,611.32 crore from Rs 42,271.41 crore in 2017-18.
The Indian reinsurer's underwriting losses amounted to Rs 2211.46 crore for the fiscal year 2018-19 compared to ₹1497.42 crore in the previous year.Investment income rose 18.7 per cent to Rs 6,401.34 crore for the year ended March 2019 compared to Rs 5,392.03 crore during the same period last year
Growth in gross premium rose 6 per cent to Rs 44,238 crore for the fiscal year 2018-19 compared to Rs 41,799.37 crore last year. Its domestic business saw a 3.9 per cent growth in gross premium to Rs 30,972 crore while international business saw a 10.7 per dent growth in growth premium to Rs 3,265.79 crore.
Around 33.5 per cent growth in gross premium came from marine business while life insurance saw a growth of 24.3 per cent.
GIC Re's investment income rose 18.7 per cent to Rs 6,401.34 crore in 2018-19 compared to Rs 5,392.03 crore during the same period last year. Its solvency ratio rose to 2.06 per cent as on 31 March 2019 compared to 1.72 per cent during the same time last year.
Total assets of the company increased by 8.40 per cent from Rs 109.672.39 crore in 2017-18 to Rs 118.883.62 crore in 2018-19.
GIC Re South Africa, GIC Re Corporate Member, London are the subsidiaries of GIC Re Group, while GIC Re Bhutan, India International Insurance Pte Ltd, Singapore and Agriculture Insurance Corporation of India are the three associate companies.
Shares of the company Thursday closed flat at Rs 226.40 on the BSE