GIC Re announced financial performance for the half year ended 30thSeptember 2022 at theBoard Meeting of company held in Mumbai .
We give below the details of our financial performance for the half year ended on 30.09.2022:
· Gross Premium Income of the company was ₹19,122.45crore for the half year ended 30.09.2022 as compared to ₹22,664.64 crore forthe half year ended 30.09.2021
· Underwriting Loss reduced to ₹1,696.07crore for the half year ended 30.09.2022as compared to ₹4,209.11 crore for the half year ended 30.09.2021.
· Investment Income is ₹ 5,096.75crore for half year ended 30.09.2022as compared to ₹ 4,464.56 crore for the half year ended 30.09.2021.
· Solvency Ratio is 2.25 as on 30.09.2022 as compared to 1.88 and 2.14 as on 30.09.2021 and 30.06.2022 respectively.
· The company recorded Profit Before Tax of ₹ 3,450.08 crore for the half year ended30.09.2022 as compared to Profit Before Tax of ₹ 47.03 crore for the half year ended 30.09.2021.Profit before tax for Q2 of Financial year 2022-23 recorded as ₹ 2,461.37 crore as compared to ₹ 1,213.76 crore for Q2 of previous year.
· Profit After Tax for thehalf year ended 30.09.2022 recorded as ₹ 2,549.65crore as compared to Profit After Tax of ₹238.82crore for the half year ended 30.09.2021. Profit after tax for Q2 of Financial year 2022-23 recorded as ₹ 1,859.93 crore as compared to ₹ 1,010.55crore for Q2 of previous year.
· Total Assets are₹1,53,384.76 crore as on 30.09.2022 as compared to ₹ 1,45,976.26 crore as on 30.09.2021.
· Net Worth of the company (without fair value change account) recorded at ₹ 26,625.07crore on 30.09.2022 as against ₹ 22,691.57 crore as on 30.09.2021.
· Net Worth of the company (including fair value change account) recorded as ₹59,203.56crore on 30.09.2022as against ₹55,088.25crore as on 30.09.2021.
· Combined Ratio is 113.92% for the half year ended 30.09.2022 as against 121.57% for the half year ended 30.09.2021.
· Adjusted Combined Ratio is 92.07% for the half year ended 30.09.2022 as against 104.40 % for the half year ended 30.09.2021.
Consolidated Financials of GIC Re
GIC Re's group includes subsidiary companies namely, GIC Re South Africa, GIC Re Corporate Member, London, and GIC Perestrakhovanie LLC, Moscow. The group also includes three associate companies namely GIC Re Bhutan, India International Insurance Pte Ltd, Singapore and Agriculture Insurance Company of India Ltd. The group performance highlights based onConsolidated Financial Statements for the half year ended 30.09.2022 are given below:
· Consolidated Gross Premium Income of the company was ₹19,367.00 crore for the half yearended 30.09.2022as compared to ₹23,166.83crore for the half year ended 30.09.2021.
· Investment Income of the groupwas ₹5,111.19crore for the half year ended 30.09.2022 as compared to ₹ 4,492.13crore for the half year ended 30.09.2021.
· Consolidated Profit Before Tax for the half year ended 30.09.2022 was ₹3,701.64 crore as compared to ProfitBefore Tax of ₹58.80crore for thehalf year ended 30.09.2021.
· Consolidated ProfitAfter Tax forhalf year ended 30.09.2022 was ₹ 2,945.89crore as compared to ProfitAfter Tax of ₹ 308.47 crore forthe half year ended 30.09.2021.
· Incurred claims Ratio is 95.01% forthe half year ended 30.09.2022as compared to98.37%for thehalf year ended 30.09.2021.
· Group's net worth (without fair value change account) forthe half year ended 30.09.2022 is₹29,802.70 crores as compared to₹25,126.83 crore forthe half year ended 30.09.2021.
About General Insurance Corporation of India (GIC Re)
GIC Re has steadfastly maintained its leadership position in the Indian reinsurance market. It is the largest reinsurer in the domestic reinsurance market in India and leads most of the domestic companies' treaty programmes and facultative placements. While foreign reinsurers have opened branch operations in India since early 2017, GIC Re is expected to maintain its market leadership and market share. GIC Re has been identified as Domestic Systemically Important Insurers (D-SIIs) for 2020-21 by insurance regulator IRDAI.
Internationally, GIC Re is an effective reinsurance partner for the Afro-Asian region, leading the reinsurance programmes of several insurance companies in Middle East and North Africa, and Asia including SAARC countries. GIC Re is 13th largest global reinsurer group based on gross written premium figures for 2020-21. It has branch offices in London and Kuala Lumpur . In April 2018, syndicate fully capitalised by GIC Re became operational at Lloyd's of London. This syndicate is expected to scale up over the next few years towards achieving the medium-term management objective of achieving 60:40 (domestic: international) risk portfolio composition. Additionally, GIC Re has 100% subsidiary in South Africa and Russia and also associate companies in Bhutan, Singapore and India. GIC Re is transacting business across the world in 160 countries.
The global economic growth is a key driver for insurance markets, which feeds into reinsurance sector. The pandemic has created significant uncertainties in regard to the growth trajectory.
GIC Re being committed to the capacity for the domestic need as well as of the subcontinent, it has proved to be a reliable Global reinsurer over many decades. Pandemic lockdown followed by global economic slowdown in 2020 has impacted performance of major global reinsurance players. Despite of such setbacks GIC Re has recouped fairly with balance sheet strength as strong, adequate operating performance, and favorable business profile as assessed by A M Best. Over the years GIC Re has catered domestic support through managing Pools and proved a formidable partner for all the social financial schemes of Government of India.
GIC Re `s business model enables to benefit from the expected growth of both the primary insurance and reinsurance markets in India as well as other large and fast-growing markets like SAARC, South East Asia, Latin America, Africa and China. GIC Re believes in diversified reinsurance products which effects better exposure management by limiting and mitigating risks.
2020 saw significant impact of the global pandemic along with rising loss from secondary perils. Also, there was a trailing impact on the market from record level of global catastrophes in 2017 and 2018. Broadly, the return on equity earned by the reinsurance sector globally for last 4 years has not been meeting investor expectations. Alternative capital continues to be deployed in the market and is finetuning its approach to the sector. The reinsurance market has shown significant signs of hardening during last few months and the trend can be expected to continue during next 5 half years. However, earlier expectations of significant hardening are being influenced by the inflow of new capital in recent months. Changing perception on climate change is likely to contribute to the uprice hardening trends in the sector.
In Indian context, as the insurers get listed and market consolidates in the backdrop of declining interest rates, the pricing discipline in the market can be expected to strengthen in the medium to long term. As can be seen from the financials, GIC Re `s profits are coming from investment income and thus, in view of emerging low interest rate regime in Indian economy, its journey will focus on moving away from reliance on the investment income.
GIC Re maintains a diversified risk portfolio that includes property, health, motor, agriculture, marine, engineering, aviation, liability. The general insurance business in India has penetration level at under 1% thus indicating great potential. Its dominance of the Indian market stems from a long-term and strong relationship with the Indian risk carriers. This is supported by continued obligatory cessions and order of preference. Its strength lies in its geographical and business diversification, long term relationships, prudent risk selection, effective exposure management, ample liquidity and efficient claims management. Its investment portfolio is also well diversified, with effective asset-liability management. Quite importantly for business that runs on human talent, GIC Re has the right talent pool with a low attrition rate.
GIC benchmarks its performance against the best-in-class global players. With the competitive advantage that it enjoys and with a domestic market growth momentum, on the strength of its balance sheet size and customer servicing, it can be expected to further strengthen its position globally.
Disclaimer: Certain statements in this document that are not historical facts are forward looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local, political or economic developments, technological risks, and many other factors. That could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. GIC Re will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstance.