India’s national reinsurance company, General Insurance Corporation of India (GIC Re), has reported that its combined ratio deteriorated to 114% during the financial year 2019.
Underwriting losses over the year were up threefold from Rs 2,211 crore ($409 million) to Rs 6,367 crore ($1.18 billion), causing the combined ratio to move from 106%.
For the most recent March quarter, GIC Re’s net profit almost doubled from Rs 603 crore (US $112 million) to Rs 1,197 crore ($222 million) but this was mainly due to lower tax provisions.
In contrast, pre-tax profit declined by 7.8% to Rs 1,101 crore ($204 million), compared to Rs 1,194 crore ($221 million) in Q4FY19
For the quarter, the reinsurer recorded an underwriting loss of Rs 464 ($85.9 million) crore versus an underwriting profit of Rs 101 crore ($18.7 million) a year ago.
“FY20 has seen the insurance industry register severe claims world-wide as well as in India,” said Devesh Srivastava, Chairman and Managing Director of GIC Re.
“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.”
In Q4 GIC Re reported a 14% increase in gross premium to Rs 9,217 crore ($1.70 billion) from Rs 8,089 crore ($1.50 billion), while for the full year, gross premium rose 15% to Rs 51,030 crore (9.45 billion) in FY20 from Rs 44,238 crore in FY19 ($8.19 billion).
In particular, GIC Re saw a 75% increase in life premium, 17% for its fire segment, 19% for marine, and 14% for miscellaneous.
And finally, investment income rose by 19% to Rs 1,909 crore ($354 million) in Q4 and by 11% to Rs 7,125 crore ($1.32 billion) for the full year.