The General Insurance Corporation of India (GIC) is reporting that its gross written premiums between Q1 2021 and Q1 2022 jumped from 88.1bn rupees ($1.1bn) to 103bn ($1.3bn).
The increase of 16.9% has been revealed in the firm’s latest results, coming from its board meeting held on 27 May.
In a statement accompanying the release of the results, GIC spoke about the impact of the coronavirus pandemic on its results.
It said: “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.”
It added: ”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 quarters. 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.”
The firm also said that its profits had originated from investment income, saying that as a low interest rate regime emerged in the Indian economy, it would focus on moving away from this.
Back in January, Moody’s said that rising premium growth and government reform was expected to strengthen the profitability of insurers in India.
The rating agency said growth prospects were to be favourable in the months ahead, supported by strong GDP expansion in India and demand for health insurance.
Specifically, the government’s plans to recapitalise India’s dominant state-owned insurers and list the country’s biggest insurer, Life Insurance Corporation of India (LIC), on the stock market were expected to bolster insurers, according to Moody’s.
Analysts believed these moves would encourage a more disciplined approach to underwriting in the respective general and life insurance sectors, while paving the way for price increases across the market, further supporting insurers’ profitability.
