GIC Re posts net loss of Rs 707 crore in Q2 as insurance claims rise

Don't want to miss the best from Business Standard?

GIC Re on Monday reported a consolidated loss of Rs 707.41 crore for the September quarter of this fiscal amid a rise in number of insurance claims.

It had posted a net profit of Rs 617.43 crore in year ago's July-September corresponding quarter. Sequential basis, the insurer had posted a net profit of Rs 153.45 crore in first quarter ended June of this fiscal.

Total income (consolidated) rose to Rs 13,384.09 crore in July-September, 2019-20 as against Rs 12,924.29 crore in the same period of 2018-19, it said in a regulatory filing.

The company said it wrote gross premium of Rs 9,511.91 crore during the quarter, higher than Rs 8,656.75 crore a year ago period.

"Against the backdrop of severe claims worldwide during the year 2019-20, higher agriculture claims and also flood claims in various parts of India, in quarter ended September 2019 underwriting performance resulted in underwriting loss to the Corporation," it said in a release.

However, going forward the trend of claims experience is expected to be better for the rest of the financial year 2019-20.

"In view of the nature of the reinsurance risks, the financial results for the period are not indicative of full year's expected performance," it added.

The insurer said it has received income tax demand notice of Rs 3,601.11 for the assessment year 2017-18 dated 30th May, 2019, which the Corporation is contesting and the matter is pending before the Principal Commissioner of lncome Tax.

Accordingly, the Corporation has disclosed the tax demand as contingent liability as the case is still pending before Tax authority.

The Company's solvency ratio of 1.60 as on 30th September 2019, which is above the minimum required solvency ratio of 1.50.

Total assets increased by 6.94 per cent from Rs 1.18 lakh crore at end September 2018 to Rs 1.26 lakh crore by end of second quarter 2019-20, it said.

Its consolidated result of General Insurance Corporation of India (GIC Re) included group subsidiary companies -- GIC Re South Africa, GIC Re Corporate Member, London, GIG Perestrakhovanie LLC, Moscow and three associate companies namely GIG Re Bhutan, India International Insurance Pte Ltd, Singapore and Agriculture Insurance Corporation of India.

Stock of GIC Re closed at Rs 281.60 apiece, up 2.72 per cent from previous close.