I have great pleasure in welcoming you to the 47th Annual General Meeting ofyour Company.
It was another eventful year for your company and with the growth momentum generatedover the last couple of years the year was one of consolidation and reflection. This is anatural outcome of any expansion and yields results that help a company plan its futurecourse of action.
It was also a second year in succession where the globe was faced with major naturalcatastrophes. However despite challenging circumstances your company succeeded inmaintaining the dividend of last year which was the highest ever for your company.
Financial Year 2019 has been eventful for the Indian economy witnessing positive effectof reforms initiated in the previous Financial Year including Goods and Service Tax andInsolvency and Bankruptcy Code etc. On the growth front FY 2019 witnessed real GDP growthof circa 7% as per the Ministry of Finance - Monthly Economic Report - March 2019.
The world GDP growth is estimated at 3% in 2018 and is expected to improve further withgrowth picking up across major economies.
The Indian non-life insurance industry maintained robust growth during FY 2019 andreported 12.86% increase in Gross f premium while life insurance industryregistered a growth of 10.73% for new business premium. The non-life insurance premium isexpected to grow further in view of the increase f in penetration ofAgriculture insurance new Government initiatives on the national health insurance schemepickup in economic growth etc. Apart from this technology will play a larger role inthe industry going forward.
The global non-life reinsurance premium reached USD 180 . Bn in 2018 reflecting agrowth of 5%. The hurricanes and typhoons that struck the US and Japan coastsrespectively caused an estimated insured loss of USD 23.8 bln. Coming close on the heelsof the Catastrophes last year this resulted in quite a few reinsurers and ILS fundswithdrawing from the market and this had a direct impact in the rates which saw stability& improvement during renewal after a very long phase of a soft cycle.
Your company continued its growth in FY 2019 reporting higher premium. The Grosspremium and net profits during FY 2019 were Rs. 44238 Crore and Rs. 2224 Crorerespectively. While Agriculture portfolio posted a modest growth as did the other classesof business too the underwriting results for the year were impacted due to majorcatastrophic events across the world and accordingly underwriting loss for FY 2019increased to Rs. 2211 Crore as against Rs. 1497 Crore in the previous year. Your companycontinued its leadership in the domestic market which contributed 70.1% of the premiumincome for FY 2019. Your company has a Net worth (including fair value of shares) of Rs.52765 Crore and total assets Rs. 118883 Crore while the Solvency ratio is 2.06.
I am also pleased that the investment performance of your company during FY 2018-19 hasbeen very strong with investment income having grown by 17% to Rs. 6130 Crore providing amean yield of 12.17%. The net non-performing assets percentage has risen from 0.56% to1.12% during the period mainly due to a very conservative provisioning for IL&FS.
With the sound financial performance your company could declare the dividend of Rs.6.75 per share for the year under review.
I am pleased to inform you that the Global rating agency A M Best reaffirmed theFinancial Strength Rating of "A- (Excellent)" and issuer credit rating of"a-" of the Corporation in April 2019 for the 12th continuous year.Your company was formally ranked 10th largest international reinsurer based onNet Written premium by S&P a stupendous achievement indeed.
The low penetration of insurance in the domestic market expansion in rural economyrevival in the private investments Governmental initiatives like Ayushman Bharat etc.would provide continued growth opportunity for the sector. Having maintained itsleadership in the domestic reinsurance market after opening up of the market last yearyour company is well positioned to take advantage of the growth in the domestic market.
The three operating branches of your company have been well established in theirrespective geographical areas and have shown a good performance. The joint ventures andsubsidiaries are consolidating their positions and gaining traction for the next level ofgrowth.
We are close to being given "Admitted Reinsurer" status in Brazil and theupgradation of our Representative office in Moscow to a full-fledged Subsidiary Company.This will enhance our footprint in South America and Former Soviet Union (FSU) countriesincluding Russia. GIC Re is poised to take on a major position in the reinsurance space ofBRICS.
Domestically we continue to encourage product innovation and have extended support toCyber Insurance Drone Insurance Latent Defect Insurance and Title Insurance.Additionally with the launch of the Flood Insurance model we are in a better position tomap our country for another major peril.
I assure you that your company has been fully geared up to support the Indian and worldinsurance industry and would continue to focus to achieve underwriting surplus in thenearest future. I take this opportunity to thank all Stakeholders Board membersCustomers intermediaries and colleagues for their continued support and co-operation inachieving yet another milestone.
Alice G. Vaidyan