The reinsurance business is undergoing complex and evolving market landscape with multiple challenges driven by catastrophic events. General insurance Corporation of India was set up in 1972 by the Government of India to supervise the Indian general insurance industry.
GIC is a national reinsurer with a global footprint providing reinsurance support to life and non-life insurers and leads reinsurance programmes of many African, Middle East and South Asian countries. GIC has a net worth of US $9.75 billion with total assets of US $ 21.39 billion . GIC is ranked 10th largest global reinsurance group as per rating agency in terms of gross premium accepted. The company was listed on major stock exchanges of India with majority ownership is controlled by the Government of India. The focus of GIC remains on navigating these risks prudently as well as writing a diversified portfolio across different classes.
The company posted decent Q3FY25 financial performance, reflecting a steady progress in building a resilient and agile reinsurance business by focusing on disciplined underwriting and risk diversification yielding tangible positive results. The company posted more business for Q3FY25 in the health segment which is totally different from the catastrophe segment . GIC intends to grow more in emerging areas such as surety bonds, cyber risk, etc. The combined ratio for the aforesaid quarter stood at 107.83% which is marked improvement from the earlier quarters on the back of optimising portfolio quality, exiting underperforming segments and increasing focus on businesses that align with its core risk appetite and profitability targets.
Gross Premium for Q3FY25 stood at Rs 9967 crores compared to Rs 8778 crores in Q3FY24 while the incurred claim ratio declined to 87.8% from 103.1% in the corresponding quarter of last fiscal. Similarly, the combined ratio for Q3FY25 declined to 107.8% as compared to 120.5% in Q3FY24. Profit before tax stood at Rs 2168 crores against Rs 1923 crores in Q3FY24 while profit after tax increased to Rs 1621 crores compared to Rs 1517 crores in the corresponding quarter of the previous year.
With solvency ratio also improving, the net worth of GIC including fair value change stood at Rs 85803 crores as on 31 December 2024 compared to Rs 77626 crores as of the previous corresponding period. From a total premium break up perspective, domestic premium for nine months ending 31 December 2024 stood at Rs 23657 crores while the International premium stood at Rs 7130 crores , with the percentage split at 77:23% respectively. The company had given a FY2025 guidance in the early part of the year that GIC would grow about 8–10% and achieve around ₹40,000 crores business target , which it is on course to achieve. As on 31 December 2024, the total premium has gone beyond ₹30,000 crores, whereas it expects another ₹10,000 crores in Q4FY25 essentially across four sector such as fire, agriculture, motor and health. The management feels that by diversifying the revenue book, GIC can offset any negative business segment against other existing sectors. For example, there is traction happening in the surety bond insurance segment with business now slowly moving from banks. Similarly, traction is also being seen in the cyber risk business as companies which are adopting technologies expect the risk to be covered. The Outlook for FY26 is also quite good with business renewals on track on the back of improvement in the companies credit rating, expectations of business interest from reinsurance companies and other business associates.
The company is forecasting substantial premium business improvement over the next few quarters. Brokers and fund managers are also quite bullish on the GIC scrip quoting at Rs 427 on the bourses to appreciate by decent levels in the next one year time frame . Portfolio investors can accumulate the GIC share at current levels for solid long term gains.
