GIC Re profit increases to Rs.672 cr

GIC Re, has reported net profit of Rs 672 crore for the quarter ended December 2017 against net loss of Rs 400 crore a year earlier, followed by better underwriting and lower claims. “Prudent underwriting, business diversification and focus on risk selection has helped report an increase in profit,” said Alice Vaidyan, chairman at GIC Re. The company reported an underwriting loss of Rs 420 crore, down for the third quarter as it focused on prudent underwriting and hardening prices across lines. Its gross premium rose 8% in the quarter to Rs 8,869 crore. Crop insurance has become the third largest segment for general insurance industry on the back of crop insurance scheme by the government, said Vaidyan. The company reported combined ratio of 101 per cent for the nine months ended December, down from 105.9 per cent a year earlier. A decline in combined ratio – which is calculated  summing the incurred losses and expenses and dividing the sum by the total earned premiums – indicates a rise in profitability. Return on equity improved to 15.9 per cent in the nine-month period, up from 4.8 per cent in the year-ago period. GIC Re has diversified geographically to grow business and profitability as well as to maintain a balanced portfolio of risks. For the third quarter, it paid claims worth Rs 6,000 crore where Rs 1,200 crore were towards crop insurance.