State owned GIC Re, at Rs 1,197 crore, has seen its net profit almost doubling year on year in Q4 FY 2019-20.In Q4 FY 2018-19, the reinsurer ‘s net profit stood at Rs 603 crore.
The listed reinsurer’s gross global premium has expanded by 14 per cent y-o-y to Rs 9,217 crore in the reporting period.
With higher premium income from all the segments like fire, motor, health and crop portfolios,the company’s net premium has gone up by 46 per cent y-o-y to Rs 8,440 crore in Q4 FY 2019-20.
However, the reinsurer with global footprint,almost 30 percent of its gross premium has come from international markets, has seen its incurred claim ratio falling from 74.8 per cent in Q4 FY 2018-19 to 89.8 per cent in Q4 FY 2019-20.
Accordingly, the company’s underwriting losses have gone up by almost four fold to Rs 463.58 crore (Rs 101 crore)in Q4 FY 2019-20 while its combined ratio(CR) has deteriorated to 114.37 per cent( a CR of below100 per cent indicates higher underwriting profitability and vice versa) in 2019-20 as against 105.86 per cent in 2018-19.
Despite having massive volatility in the capital markets, the company’s investment income has increased by almsot 20 per cent y-o-y to Rs 1909 crore in Q4 FY 2019-20.
Devesh Srivastava, CMD, GIC C Re, said, "GIC Re has maintained its market standing in both domestic and foreign businesses.We have crossed Rs 50,000 crores in our gross global premium during the year However,fiscal 2020 has seen the insurance industry register severe claims world-wide as well as in India. The explosion of the Covid-19 Pandemic has further aggravated the situation leading to an impact on the financial markets and the economy in general."
He added that the highlight, however, has been a strong performance in the fourth quarter with a profit after tax of Rs. 1,197 crore which has offset a large proportion of the losses incurred in the three quarters of the year 2019-20. And there is a marginal improvement of solvency over December.
For the full year – 2019-20
Growth in gross premium income of the company was 15.35 per cent with premium of Rs 51,030.13 crore for the FY 2019-20 from Rs 44.238.00 crore in FY 2018-19.
The reinsurer's premiums from domestic market has soared by 17 per cent y-o-y to Rs 36,233.84 in 2019-20 while its premiums from international markets have climbed up by 15 per cent y-o-y to Rs 14,796.29 in the same period.
The company recorded loss before tax of Rs 445.97 crore in FY 2019-20 as against profit before tax of Rs 3,433.82 crore in the previous year. The reduction in profit is on account of provisioning for investments and increase in agriculture losses.
At Rs 15,470 crore, up 16.4 per cent y-o-y, the crop portfolio has contributed the maximum to the company's premium kitty in 2019-20.The premiums from health business has risen by 8.6 per cent y-o-y to Rs5,588 crore in 2019-20. GIC Re's motor business at Rs 9,440 crore,has gone up by 13 per cent y-o-y in 2019-20, .The company's fire portfilio has gone up by 16.6 per cent y-o-y to Rs 12,026.97 in 2019-20.
The life reinsurance portfolio of GIC Re has grown by whopping 75 per cent y-o-y to Rs 955 crore in 2019-20
Net worth of the company (without fair value change account) recorded as Rs 20,529.45 crore on 31.03.2020 as against, 22,334.42 crore on 31.03.2019. Total Assets of the company wast Rs 1,16,196.20 crore as on 31.03.2020 as compared to Rs 1, 18.883.57 crore as on 31.03.2019.