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General Insurance Corp. posts Q2 net loss as agricultural & flood claims rise

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General Insurance Corporation of India reported a net loss of Rs 595.45 crore in Q2 September 2019 as against net profit of Rs 513.84 crore in Q2 September 2018.

Total income of the general insurer rose 4.14% to Rs 13412.49 crore in Q2 September 2019 from Rs 12879.70 crore in Q2 September 2018.

Against the back drop of severe claims worldwide during the year 2019-20, higher agriculture claims and also flood claims in various parts of India, in quarter ended 30 September 2019 underwriting performance resulted in underwriting loss to the corporation.

Therefore, the underwriting loss (inclusive of exchange gain) stood at Rs 3154.28 crore in half year ended 30 September 2019 as against underwriting loss of Rs 2098.19 crore in corresponding period of previous year. However, going forward the trend of claims experience is expected to be better for the rest of the financial year 2019-20, GIC said in a press release.

The company recorded loss before tax of Rs 481.13 crore in half year ended 30 September 2019 as against profit before tax of Rs 1199.64 crore in the corresponding period of previous year. The reduction in profit is on account of provisioning of IL&FS (Q1), DHFL and reduction in other income such as exchange gains and provision for increase in agriculture losses.

Underwriting loss (inclusive of exchange gain) recorded Rs 3154.28 crore in half year ended 30 September 2019 as against underwriting loss of Rs 2098.19 crore in corresponding period of previous year. Hurricane activity during the second quarter of finanacial year 2019-20 put pressure on reinsurer's results, though the premium will be earned in the second half of the year. Therefore, Q3 and Q4 should show better results due to increase in premium earnings.

Loss after tax for the half year ended 30 September 2019 was Rs 486.86 crore compared to profit after tax of Rs 1,285.27 crore in corresponding period of previous year.

Growth in gross premium income of the company was 11.6% with premium of Rs 30,272.33 crore for the half year ended 30 September 2019 from Rs 27,117.40 crore in the corresponding period of previous year.

Investment income of Rs 3,197.01 crore for the half year ended 30 September 2019 as compared to Rs 3,281.27 crore for the corresponding period of previous year.

Combined ratio is 111.30% for the half year ended 30 September 2019 as compared to 110.30% for the corresponding period of previous year.

Solvency ratio of the corporation stood at 1.60 as on 30 September 2019, which is above the minimum required solvency ratio of 1.50.

Total assets increased by 6.94% from Rs 1,17,895.37 crore as on 30 September 2018 to Rs 1,26,080.50 crore as on 30 September 2019.

GIC reported a consolidated net loss of Rs 707.41 crore in Q2 September 2019 as against a net profit of Rs 617.43 crore in Q2 September 2019. Consolidated total income rose 3.56% to Rs 13384.09 crore in Q2 FY20 from Rs 12924.29 crore in Q2 FY19.

GIC's consolidated results includes results of its subsidiaries namely GIC Re South Africa, GIC Re Corporate Member, GIC Perestrakhovanie LLC and three associate companies which are Agriculture Insurance Corporation of India, GIC Re Bhutan Re and India International, Singapore.

Shares of GIC Re ended 2.72% higher at Rs 281.60 on Monday, 11 November 2019.

BSE, NSE are shut today, 12 November 2019, on account of Guru Nanak Jayanti.

General Insurance Corporation of India (GIC Re) is the largest reinsurer in the domestic reinsurance market in India.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, November 12 2019. 16:02 IST
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