HDFC Securities: GIC Reinsurance Continues To Surprise Negatively With Continually High Loss Ratios
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HDFC Securities Report
General Insurance Corporation of India Ltd. is India’s largest reinsurer, but it continues to make significant underwriting losses (Q2 FY21 combined operating ratio: 122.1%).
A calibrated approach to underwriting is expected to change this over FY21-23E.
We estimate an FY22/23E adjusted return on equity is at 8.7/10.9%, and value the company at 0.7 times September-22E accredited in business valuation less 10% discount for an additional 10.8% stake to be sold by Government of India.
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