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Last Updated : Feb 08, 2019 06:32 PM IST | Source: Moneycontrol.com

GIC Re Q3 net profit down 50% on rise in tax provision

The reinsurer made a tax provision of Rs 704.43 crore in Q3 compared to Rs 115.22 crore in the year-ago period.

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General Insurance Corporation of India (GIC Re) posted a 50 percent year-on-year (YoY) drop in its net profit for the December quarter at Rs 335.67 crore on account of higher provisions for taxation and for doubtful debts.

GIC Re said that they have a total exposure of Rs 791.33 crore in IL&FS and other group companies, for which they have made a provision of Rs 78.88 crore, which is 10 percent of the total exposure. It added that there was a default in September 2018. IL&FS that is reeling under a debt crisis has defaulted on several debt payments from June 2018 onwards.

The reinsurer made a tax provision of Rs 704.43 crore in Q3 compared to Rs 115.22 crore in the year-ago period.

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However, GIC Re saw an improvement in underwriting performance and reduction of underwriting losses. In the December quarter, the underwriting loss went down to Rs 16.46 crore compared to a loss of Rs 293.10 crore a year ago and Rs 2,264.88 crore sequentially (Q2).

The combined ratio improved to 97.96 percent in Q3 compared to 105.36 percent in the year-ago period. A ratio below 100 percent indicates that the claims losses are under control.

Among the business segments, almost all segments including marine cargo, personal accident, aviation and agriculture that posted an underwriting loss in Q3FY18 turned profitable. Agriculture, for instance, had an underwriting profit of Rs 233.93 crore in Q3 as compared to loss of Rs 2,440.19 crore in the year-ago period.

Only the fire segment saw a jump in underwriting loss to Rs 621.39 crore in Q3 from Rs 416.15 crore loss in the year-ago period.

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First Published on Feb 8, 2019 06:32 pm
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