Devesh Srivastava, CMD, GIC Re
“Profit is the only embedded principle of all our business. We will not do any business that is not adding to our bottom line. We have restructured our entire organisation and manpower in recent years to deliver on results,” said Devesh Srivastava, CMD, GIC Re who will be hanging his boots in September end
Mumbai:
With a robust investment income, state owned GIC Re on Thursday reported a 6.1 per cent increase year-on-year (y-o-y)in its net profit at Rs 732 crore in the June quarter, despite a steep fall in gross premium income and massive underwriting of losses.
The third largest Asian reinsurer had recorded a net profit of Rs 689.72 crore in the year-ago period, it said.
GIC Re, which has been shedding loss making business in recent years, said its gross premium income in Q1 FY 24 declined to Rs 8,917.71 crore from Rs 11,021.83 crore in the year-ago period.
“Profit is the only embedded principle in all our business. We will not do any business that is not adding to our bottom line. We have restructured our entire organisation and manpower and processes in recent times to deliver on results,” said Devesh Srivastava, CMD, GIC Re, who will be hanging his boots in September end.
Except, in Motor and Marine Cargo, the reinsurer which is facing competition from almost dozen of foreign reinsurer’s branches(FRB),which are operating in India, has reduced its exposure to the rest of the segments like Fire, Health, Crop and Life portfolios during the reporting period.
GIC Re, one of the 15 largest global reinsurers, had seen its a total underwriting losses more than doubling to Rs 1,557.44 crore in the quarter under review compared to that of Rs 776.29 crore in the year-ago period.
GIC Re’s incurred claims for its international business has marginally risen to Rs 3000 crore in Q1FY24 as compared to Rs 2,971 crore in the year-ago period while its claim payment for its domestic business has fallen by almost 30 per cent y-o-y to Rs 5,150 crore as compared to Rs 7,197 crore in the year-ago period.
The larger underwriting of losses saw its combined ratio — a key profitability metric in general insurance — falling to 118.47 during the quarter as against 110.97 for the year-ago period.
The adjusted combined ratio — the sum of the loss ratio and the expense ratio — stood at 97.24 as against 97.01 in the year-ago quarter.
The reinsurer’s investment Income soared by almost 30 per cent year- on- year to Rs 2,454.94 crore for the reporting quarter as compared to Rs 1,890.43 crore for the year-ago period.
The solvency ratio of the state-run firm rose to 2.88 from 2.14. Total assets of GIC Re rose to Rs 1,64,258.75 crore from Rs 1,46,178.09 crore.
GIC Re’s total assets as on June 30, 2023 were Rs 1,64,258. 75 crore .as compared to Rs 1,46,178.09 crore in the year ago period.
The company’s net worth (without fair value change account) recorded at Rs 32,984.27 crore as on June 2023 as against Rs 26,345. 14 crore as on June 30,.2022.
The reinsurer’s gross premium income during the quarter declined to Rs 8,917.71 crore from Rs 11,021.83 crore, while the net premium fell to Rs 8,231.17 crore from Rs 10,493.68 crore.
It has expanded its premium kitty from its international business from 25 per cent 38 per cent in the Q1FY24.
The company paid Rs 1,840.94 crore in commission as against Rs 1,655.56 crore in the June quarter last year. The commission as a percentage of net premium increased to 22.4 per cent from 15.8 per cent a year earlier. The firm’s management expenses nearly doubled to Rs 86.28 crore from Rs 49.80 core.