An agent selling insurance products to customers. Photographer: Brendon Thorne/Bloomberg.

Q4 Results: GIC Re Posts Underwriting Loss On Higher Crop, Motor Claims

General Insurance Corporation of India Ltd. reported an underwriting loss in the quarter ended March as it paid higher crop and motor claims.

The reinsurer’s underwriting loss stood at Rs 1,170 crore compared with a profit of Rs 1,269 crore in the year-ago period, according to its exchange filing. Underwriting income is the difference between premiums earned and claims and expenses incurred.

The underwriting losses for crop were the highest at Rs 1,358 crore against a profit of Rs 614 crore in the same quarter a year ago. Motor insurance underwriting losses widened to Rs 570 crore.

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Poor underwriting performance meant the company’s profit fell 71 percent to Rs 752 crore in the fourth quarter.

Other Highlights

  • Earned premium fell 28 percent to Rs 7,053 crore.
  • Incurred claims to earned premium ratio increased to 94.5 percent from 70 percent.
  • Combined ratio rose to 116.5 percent from 89 percent. A combined ratio over 100 reflects underwriting losses.
  • Solvency ratio fell to 1.72 from 2.4. The minimum solvency requirement for insurers and reinsurers in India is 1.5.
  • Investment income remained flat at Rs 1,780 crore.