Underwriting losses jumped almost nine times in the June quarter compared to a year ago
General Insurance Corporation of India (GIC Re) posted 85.9 percent year-on-year (YoY) drop in its June quarter (Q1) net profit to Rs 108.59 crore. The steep fall was due to an almost nine times jump in underwriting losses to Rs 854.37 crore and an increase in provisions.
Provisions for doubtful debt rose to Rs 402.96 crore in Q1FY20 compared to Rs 57.74 crore a year ago.
The gross premium income grew 10.8 percent to Rs 20,813.12 crore in the June quarter.
The investment income increased 26.24 percent YoY to Rs 1,401.90 crore for the June quarter.
The company's net worth (without fair value change account) increased 0.5 percent to Rs 22,443 crore as on June 30, 2019.
"The reduction in profit is on account of provisioning of IL&FS and reduction in other income such as exchange gains," said the company in a statement.
The underwriting loss (inclusive of exchange gain) stood at Rs 854.37 crore in Q1FY20 compared to Rs 96.37 crore in the year-ago period.
Due to this, the combined ratio rose to 102.6 percent for the June quarter as compared to 99.9 percent in the same quarter last year.
The solvency ratio stood at 1.89 as on June 30, much above the minimum required solvency ratio of 1.50.GIC Re's total assets increased by 6.31 percent YoY to Rs 1,28,776.53 crore at the end of the June quarter.