GIC Re Q2 net profit jumps over fivefold

General Insurance Corporation of India (GIC Re) on Monday reported over fivefold jump in net profit to ~1,419.11 crore for the quarter ended September 2017, as against ~252 crore in the yearago quarter. The surge in profit was attributed to fewer claims, and higher premium collection from the agriculture segment.

Gross premium dipped to ~7,210 crore from ~10,177 crore in the same quarter last financial year. The drop was due to technical reasons, said the company. “In the September quarter of 2016-17, we had collected over ~5,800 crore from agriculture insurance, as the implementation of the scheme was delayed a bit. But now, as the agriculture scheme is established, we received around ~11,000 crore of the kharif premium in the June quarter itself,” said a senior official of GIC Re.

The agriculture class of premium recorded a growth rate of 96.2 per cent amounting to ~11,091.27 crore for half year ended September 2017, compared to ~5,654.47 crore in half year ended September 2016.

GIC Re, which got listed last month, posted underwriting profit of ~757.36 crore compared to underwriting loss of ~668.36 crore in the same period last financial year.

“The major segments that have turned profitable are marine and agriculture. But overall also, we have grown across the segments and this has resulted in underwriting profits,” said Alice G Vaidyan, chairman and managing director, GIC Re.

Going forward, the reinsurance industry could see hardening of prices across segments due to the impact of hurricanes in the US. This could lead to higher reinsurance demand, said Vaidyan.

For the first six months ended September 30, 2017, GIC Re saw gross premium of ~24,404 crore, compared to ~16,118 crore seen in six months ended September 30, 2016.

The net worth of the company increased 17.5 per cent to ~18,549.92 crore as on September 2017 from ~15,786 crore as on September last year. The combined ratio for the first six months of this financial year was 99.4 per cent, compared to 99.1 per cent for the half year ended 2016.

The share of GIC Re on Monday closed at ~811.25, down by one per cent over the previous close.