Erratic Weather, ‘Poor Underwriting’ Hits Top India Reinsurer

(Bloomberg) -- Shares of General Insurance Corp. of India headed for a record plunge after India’s reinsurance giant swung to a loss on higher farm and property damage claims.

GICRE blamed floods across India and “severe claims worldwide” for its 10.7 billion rupee ($150 million) loss in the quarter ended December, against a profit of 3.36 billion rupees a year earlier.

The firm’s global fire business faced higher losses in the previous three years compared with larger rivals, Avinash Singh, an analyst at SBICap Securities Ltd., wrote in a report. “This persistently poor underlying underwriting performance raises questions over GICRE’s risk selection and pricing,” he said.

Shares plunged 10.7% as of 2:07 p.m. in Mumbai on Tuesday, their biggest single-day loss since the stock debuted in 2017. India’s benchmark index was up 0.8%.

The Indian government owns 85% of GICRE while state-controlled Life Insurance Corp. of India holds a little less than 9%.

The company’s underwriting loss more than doubled to 59 billion rupees during April-December, hit by claims across crop, fire, and motor segments.

--With assistance from Nupur Acharya.

To contact the reporter on this story: Ashutosh Joshi in Mumbai at ajoshi86@bloomberg.net

To contact the editors responsible for this story: Pradeep Kurup at pkurup3@bloomberg.net, Jeanette Rodrigues, Karthikeyan Sundaram

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