State-owned reinsurer GIC Re on Tuesday reported a net loss of Rs 557.47 crore for the quarter ended June 2020. The company had posted a net profit of Rs 108.60 crore in the corresponding period of the previous financial year.
GIC Re said the company saw reduction in business mainly due to the pandemic and partially due to strategic reduction of risk acceptance because of a fall in overall direct premium in the domestic market. It, however, added that its foreign business has grown over the past year.
Its underwriting losses more than doubled to Rs 1,771.35 crore during the June 2020 quarter, compared with Rs 854.37 crore in the year-ago period, the company said.
Investment income declined to Rs 1,142.83 crore, from Rs 1,401.90 crore a year ago.
Gross premium declined to Rs 15,881.55 crore from Rs 20,813.12 crore, while net premium fell to Rs 14,625.28 crore compared with Rs 19,644.06 crore and earned premium slipped to Rs 13,661.83 crore from Rs 16,737.12 crore.
The company reported an improvement in incurred claims at Rs 12,868.74 crore from Rs 14,700.69 crore. Its net commission declined to Rs 2,559.87 crore or 17.5 per cent from Rs 2,845.33 crore or 14.5 per cent a year ago.
The company said it expects a rebound during the rest of the year.
"Pre-tax profit declined Rs 138.90 crore in the quarter to June; while after tax, the company had a net loss of Rs 557.47 crore as against a net profit of Rs 108.60 crore in 2019.
"Net loss is attributable to higher underwriting loss and reduction in investment income," the company said.
Also, the networth slipped to Rs 19,714.81 crore, from Rs 22,443.07 crore in the first quarter of 2019-20 and Rs 20,529.45 crore as of March 2020.
The incurred claims ratio increased from 87.8 in the reporting quarter to 94.2 in the corresponding quarter last fiscal but improved from 97.5 as of March 2020.
The company saw its underwriting losses more than doubling to Rs 1,771.35 crore from Rs 854.37 crore a year ago.
The combined ratio stood 112.16 for the quarter compared to 102.63 a year ago and at 114.38 as of March 2020, while the adjusted combined ratio stood at 105.88 compared to 97.24 y-o-y and at 102.47 for 2019-20.
First Published: Sept 8, 2020 11:28 PM IST
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