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GIC Re posts 110% 9M CR as UW loss narrows

ReutersFeb 5, 2025 4:04 PM

By Ryan Hewlett

- (The Insurer) - India’s state-backed reinsurer GIC Re narrowed its underwriting loss for the nine months to 31 December 2024 as it reported a combined ratio of 110.5 percent.

  • Combined ratio improves 7.4 pts to 110.5% for 9M

  • GWP rises 6.9% to INR30,787 crore

  • Underwriting loss narrows to INR2,959 crore

This was an improvement of 7.4 percentage points from the 117.9 percent reported in the prior-year period. On an adjusted basis, the combined ratio was 89.1 percent, an improvement of 3.2 points from the 92.3 percent reported at 31 December 2023.

GIC Re – which is still majority-owned by the state despite its October 2017 IPO – grew gross premium income by 6.9 percent in the nine-month period to INR30,787 crore, compared to INR28,778.26 crore in the prior-year period.

Domestic premium for the nine-month period stood at INR23,657 crore, up 20.8 percent year on year, while international premium stood at INR7,130 crore, down 19.7 percent.

Domestic reinsurance business accounted for 77 percent of total gross premium in the nine months to 31 December, with international business making up the remainder.

Gross premium income rose 13.5 percent to INR9,967.71 crore from INR8,778.26 crore in the same period in 2023. The incurred claims ratio for the quarter declined to 87.8 percent, compared to 103.1 percent in the prior-year period.

The reinsurer – which in October was upgraded to A- from B++ by AM Best – saw its underwriting loss narrow by 35 percent to INR2,959.34 crore, compared to an underwriting loss of INR1,54,758 crore in the same period in 2023.

GIC Re’s results come against a backdrop of significant regulatory change in India after the country’s insurance watchdog recently approved a series of amendments to reinsurance rules in a long-anticipated overhaul designed to position it as a prominent global reinsurance hub.

The Insurance Regulatory and Development Authority of India (Irdai) in October revealed it is considering the introduction of collateral requirements for reinsurance transactions with cross-border reinsurers.

This came after the regulator in August unveiled new rules to increase the overall capacity of the reinsurance sector and reduce the compliance burden on entities operating in the sector.

The changes also pave the way for GIC Re to lose its right of first refusal on domestic reinsurance contracts.

GIC Re has a privileged status within the Indian reinsurance market despite a slow liberalisation to allow access by foreign reinsurers. The reinsurer, the largest in India, leads the majority of domestic insurer treaty programs and facultative placements.

GIC Re is currently given the right of first refusal on reinsurance contracts and if it declines to accept a risk, only then it would be given to foreign reinsurers’ branches. This right of first refusal was enacted through regulation in March 2019 and has since been reviewed by Irdai on an annual basis.

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