“Having had significant degrowth in last few quarters, we believe that we are at a point where growth with profitability should drive our business strategy” N Ramaswamy, CMD GIC Re
Though, GIC Re’s underwriting losses have risen by 60 per cent y-o-y to Rs 1472 crore, its combined ratio has improved to 115.83 per cent in Q2FY24 as compared to 117.89 per cent in the year-ago period
Mumbai:
With almost 14 per cent dip in profitability, state owned GIC Re has once again started growing its topline, after degrowing it for the last couple of years, in the second quarter of FY 24.
The third largest Asian reinsurer has seen its net profit sliding by almost 14 per cent year –on- year (y-o-y) to Rs 1,605 crore while its gross premium rose by 33 per cent y-o-y to Rs 10,762crore during reporting quarter.
The reinsurer had undertaken an extensive restructuring of its business to boost its solvency and to be profitable by shedding loss making segments in the last couple of years.
“I think for any business, the choice between top line and bottom line would depend upon the circumstances and business performance that is achieved with a given strategy. It must be said that degrowth was incidental to the bottom-line objective,” said N Ramaswamy, who became CMD of GIC Re on Oct 1.
“Having had significant degrowth in last few quarters, we believe that we are at a point where growth with profitability should drive our business strategy. Our choice of business was driven by price adequacy at contract level rather than based on any segment,” added Ramaswamy.
GIC Re’s competes with top 11 top global reinsurers which are having branches in India and 300 cross boarder reinsurers(CBRs) to grow its domestic business.
Though, GIC Re’s underwriting losses have risen by 60 per cent y-o-y to Rs 1472 crore , its combined ratio has improved to 115.83 per cent in Q2FY24 as compared to 117.89 per cent in the year-ago period.
The reinsurer, which is the18th largest global reinsurer on the basis of ranking given by the international rating agency Standard & Poor’s, has seen its investment income slightly shrinking to Rs 3100 crore in Q2FY24 as against Rs 3206 crore in the year-ago period.
Total assets of the reinsurer during Apr-September period have surged by almost 10 per cent y-o-y to Rs1,67,640.89 crore as on September 30 as compared to Rs 1,53,384.76 crore in the year ago period.
GIC Re, which has earned 33 per cent of its business from international markets, has increased it by 16 per cent y-o-y to Rs 6592 crore in Q2FY24. The reinsurer’s Indian business dropped marginally to Rs13,087 crore in Q2FY24.
The reinsurer has increased its premium inflow from Motor, Health, Marine(Cargo) and Life portfolios and continued to reduce its exposure in Crop and Fire business during Q2 FY24.
GIC Re’s solvency ratio is at 2.82 as on September 30 as compared to 2.25 in the year-ago period.