Combined ratio to come down to 100% in the next 4-5 quarters: GIC RE
Devesh Srivastava, Chairman & MD of GIC RE said, the idea is to improve the portfolio, make it much more worthy and get the combined ratio as close to 100 percent. It will take about 4-5 quarters but that is the journey that is in front of us.
GIC RE reported a good set of fourth-quarter numbers wherein the year-on-year net premium was down at Rs 8,241 crore versus Rs 8440 crore. However, the profit after tax was up at Rs 1,260 crore versus Rs 1,197 for the same period last fiscal. The YoY combined ratio for the quarter improved at 103.9 percent versus 107.6 percent.
Devesh Srivastava, chairman and managing director, GIC RE, said, "A combined ratio for us is the Holy Grail and that is where a performance of a reinsurer ought to be measured. “For us we have set a target of combined ratio of as close to 100 percent because that is where the sustainability of operations come to fore,” he said, adding they were moving in right direction.
“The idea is to improve portfolio, make it much more worthy and get the combined ratio as close to 100 percent. It will take about 4-5 quarters but that is the journey that is in front of us,” told CNBC-TV18.
He said there has been a big uptick in the purchase of health insurance, which bodes well for both insurers and reinsurers. “Indians are risk-averse and do not believe in buying insurance and reinsurance. As things start moving forward and people start looking at insurance as something that should form a basic part of their day-to-day existence, is great sign for us,” he said.
According to him, though the quarterly figures show an improvement over the earlier quarter, the journey for reinsurance is a long way. “We are moving in the right direction and this trend ought to continue,” he added.
He said they do look at quarter-on-quarter reports but the essence of reinsurer is its annual report. “We operate in a lag to the direct market. So, what a direct market will see today, is what the reinsurer will see in a couple of quarters,” he added.
He said although they have seen a large number of COVID claims, a lot of planned operations have been shifted forward.
For the full interview, watch video.
First Published: Jun 30, 2021 4:56 PM IST
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