AM Best upgrades credit ratings of GIC Re's to 'A-' (Excellent)

State-owned General Insurance Corporation of India (GIC Re) on Friday announced that it has received an upgrade in its Financial Strength Rating (FSR) and Long-Term Issuer Credit Rating (ICR) from AM Best, a globally recognised credit rating agency, to “A-” (Excellent) from “B++” (Good), and the Long-Term ICR has been upgraded to “A-” (Excellent).

The outlook for both ratings has been revised to stable. In addition, AM Best has reaffirmed GIC Re’s India National Scale Rating (NSR) of aaa.IN (Exceptional) with a stable outlook.

Earlier, Ramaswamy N, chairman and managing director (CMD) of GIC Re, told Business Standard, “Since in most markets, the regulators would want an ‘A-’, we have decided not to grow our international business unless we are able to grow without incurring additional costs. So, last year AM Best gave us a double push. Now, we are only one notch below ‘A-’. Hopefully, if we get it this year, then we'll start growing that book. Most of the international business starts on January 1. So, once we get the rating this year, we'll be ready for growth from January 1 (2025).”

The upgrades reflect GIC Re’s strong balance sheet, marked by an improvement in risk-adjusted capitalisation, as evidenced by Best’s Capital Adequacy Ratio (BCAR). This achievement has been driven by significant gains in investment fair value and an increase in retained earnings, contributing to a rise in shareholders' equity.

Additionally, GIC Re’s business profile has been recognised as favourable, with the company ranked as the 10th largest (non-IFRS 17 basis) reinsurer globally, according to AM Best’s latest rankings of the top 50 reinsurers worldwide.