With reduced premium,investment income and higher underwriting losses, state owned GIC Re suffered a loss of Rs 557.47 crore in Q1 Fy 2020-21 as compared to profit after tax of ₹ 108.60 crore for corresponding quarter of the previous fiscal.
“The reduction in profit is attributable to higher underwriting loss and reduction in investment income,’’ said GIC Re on Monday after its board finalised its results for the June quarter..
Global scenario for insurance industry for the FY 2020-21 has shown weak trends due to COVID-19 situation. GIC Re although has maintained its prominent position in Indian insurance sector, there has been reduction in business for the Q1 2020-21 partially due to strategic reduction of risk acceptance and partially due to reduction of overall direct premium in India, said the corporation..
GIC Re however expects to see rebound in business during the rest of the year. GIC Re’s gross premium for foreign business has shown a growth for the 1st Quarter 2020-21, added the corporation…
The reinsurer ‘s gross premium income has fallen by 24 per cent year on year (Y-O-Y) to Rs15,881.55 crore in the reporting quarter.The reinsurer's domestic
premium,contributing 75 per cent, has plunged by 32 per cent y-o-y to Rs 11,897.67 crore,while its premium from overseas business,with a share of 25 per cent, ,has risen by 17 per cent y-o-y to Rs 3,983.87 in reporting quarter.Underwriting losses of the company more than doubled to Rs 1,771.35 crore in the reporting quarter.
Combined Ratio(CR) of the company was at 112.16 per cent for the Q1 2020-21 as compared to 102.63 per cent for the corresponding quarter of FY 2019-20.
The CR is arguably the most important parameter for a re/insurnace company as it provides a comprehensive measure of an insurer's profitability. A ratio above 100 percent means that it is paying out more money in claims that it is receiving from premiums.
Adjusted combined ratio of the company was 105.88 per cent in Q1 FY 2021 as compared to 97.24 per cent for the corresponding quarter in FY 2019-20 and 102.47 per cent for FY 2019-20.
Incurred claims ratio of the company increased to 94.2 per cent in the reporting quarter from 87.8 per cent in Q1 FY 2019-20 but improved from 97.5 per cent as in FY 2019-20.
Investment Income of the company shrunk by 18 per cent y-o-y to Rs 1,142.83 crore for the Q1 2020-21.
The solvency ratio of the company was at 1.52 as on June 30,2020.
Total assets of the company were Rs 1,29,291.31 crore as on June 30,2020 as compared to Rs1,28,776.54 crore as on 30.06.2019.
The company recorded loss before tax of Rs 811.22 crore in the q1 FY 2020-21 as against profit before tax of Rs 138.90 crore in the quarter ended June 30..
Net worth of the company (without fair value change account) recorded as Rs19,714.81 crore on June 30, 2020 as against Rs 22,443.07 crore on June 30,2019 and Rs 20,529.45 crore as on March 30, .2020.
Net Worth of the company (including fair value change account) recorded as Rs 39,071.36 crore on June 30,.2020 as against Rs 52,181.82 crore on June 30,.2019 and Rs 35,425.87 crore as on Mar 30, 2020.
Except fire, the corporation has cut down all its major portfolios. The premium from its largrst portfolio, agriculature business,has fallen by 34 per dent y–o- y to Rs 6,983.24 in Q1FY2020-21.
However, with a CR of 93.86 per cent in its domestic agriculture business,the portfolio, along with its life portfoio, with CR of 88.89 per cent, has been profitable for the compoany in Q1 FY 2020-21.The rest of the major portfolios like fire,health, motor have CR of 129.35 per cent, 157.20 per cent, 129.35 per cent respectively in Q1 2020-21.