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    General Insuranc

    GICRE
    Financial Services·8 Aug 2025
    Management Summary

    GIC Re delivered a robust Q1 FY26 performance with significant increases in PBT and PAT, driven by improved underwriting and strong investment income. The combined ratio improved despite major extraordinary losses, and the solvency ratio remained healthy. While gross premium income saw a slight dip due to accounting changes, the company maintains a positive outlook for the year, focusing on profitable growth and strategic portfolio optimization.

    Highlights

    6

    • Profit Before Tax (PBT) increased by 61.04% to INR2,243.54 crores, reflecting strong profitability.

    • Profit After Tax (PAT) grew by 69.08% to INR1,752.22 crores, demonstrating robust bottom-line performance.

    • Underwriting loss significantly reduced by 29.54% to INR907.76 crores, despite two large extraordinary losses.

    • Gross investment income rose by 18.37% to INR3,228.51 crores, contributing positively to overall results.

    • Combined ratio improved by 2.66 percentage points to 106.94%, indicating better operational efficiency and risk management.

    • Solvency ratio remained robust at 3.85%, up from 3.36% in the previous year, highlighting strong capital adequacy.

    Concerns

    3

    • Gross premium income slightly decreased by 0.14% YoY to INR12,388.01 crores, primarily due to IRDAI's accounting changes for long-term policies.

    • Health segment experienced de-growth due to non-renewal of some treaties and rising medical inflation.

    • Two large extraordinary losses (Jindal Poly Films and Air India aviation) impacted incurred claims, though adequately provided for.

    What Changed2

    vs Q2 FY26

    Guidance items5 → 8 (+3)Risks discussed5 → 8 (+3)

    Key financials

    Single quarter

    07 metrics
    1. 01Gross Premium Income₹12,388.01 Cr-0.1%YoY
    2. 02Underwriting Loss₹907.76 Cr-29.5%YoY
    3. 03Gross Investment Income₹3,228.51 Cr+18.4%YoY
    4. 04Profit Before Tax (PBT)₹2,243.54 Cr+61.0%YoY
    5. 05Profit After Tax (PAT)₹1,752.22 Cr+69.1%YoY

    Guidance & targets

    8
    CategoryTargetPriority
    Overall Growth
    Overall growth
    9-10%
    		High
    International Growth
    International growth
    17-20%
    		High
    Domestic Growth
    Domestic growth
    6.5-8%
    		Medium
    Commission Ratio
    Commission ratio
    18-19%
    		High
    Combined Ratio
    Overall Combined Ratio
    106.8-107%
    		High
    Combined Ratio
    Domestic Combined Ratio
    104-105%
    		High
    Combined Ratio
    Foreign Combined Ratio
    110%
    		High
    Capital Gains
    Capital gains realized
    around the same level or even slightly higher
    		Medium

    IFRS implementation and disclosure of IGAAP/IndAS figures

    Q3 FY26
    CurrentWorking on it, may share from Q3 FY26
    TargetDisclosure of both IGAAP and IndAS figures

    Why it matters

    The shift to IFRS will significantly alter financial reporting, especially investment valuation and ROE, requiring investors to understand the new basis.

    Hopefully, we will not even wait for the dates that IRDAI has given for implementation. We'll actually start doing that much earlier. And we will be in a position to hopefully give you both the figures, the IGAAP as well as the IndAS figures, maybe from the third quarter of this year.

    How to verify

    detailed_narrative

    Risks & concerns

    8
    RiskSeverity

    Persistent global uncertainty (inflation, geopolitics, climate risks)

    These factors contribute to heightened volatility across financial and insurance markets, but GIC Re navigates through underwriting discipline. — Management acknowledged

    medium

    Catastrophic events (Jindal Poly Films fire, Air India aviation loss)

    Two large extraordinary losses impacted Q1, but management states they are adequately provided for with comprehensive risk frameworks. — Management acknowledged

    high

    Medical inflation and rising losses in health segment

    Medical inflation and creeping losses led to non-renewal of some health treaties, resulting in de-growth in the segment. — Management acknowledged

    medium

    Softening rates in international market

    International market saw rate softening, but GIC Re leveraged its credit rating improvement to secure good new business. — Management acknowledged

    low

    Competition in domestic reinsurance market

    Increased competition from FRBs and other players, but GIC Re focuses on profitable business and market development. — Management acknowledged

    medium

    Long-tailed policies (Life business) requiring continuous provisioning

    Life business, being long-tailed, requires continuous monitoring and provisioning to ensure no future shocks from claims. — Analyst acknowledged

    medium

    IFRS implementation impact on investment valuation (market value basis)

    IFRS will require investments to be valued at market price, potentially reflecting market dips negatively, necessitating a different investment management approach. — Analyst acknowledged

    medium

    Catastrophic losses in Q3/Q4 (seasonal)

    Q3 and Q4 are typically periods for catastrophic losses, and their impact on the combined ratio will need to be monitored. — Management acknowledged

    high

    Q&A highlights

    8

    “The top line growth on the international has grown because of our credit rating improvement, which happened in October last year, which gave us a chance to look at really good businesses on the 1st Jan renewals, and we managed to write a substantial amount of increase there. Secondly, on the domestic side, yes, again, you're spot on in saying that the property premium today looks a little subdued simply because quarter-on-quarter when you compare, you're comparing 2 different quarters. In the last quarter, the premium of long-term policies were fully accounted for. Today, we have apportioned them across the different years for which the policy is taken.”

    Clarifies that international growth is driven by credit rating upgrade and new business, not rate hardening, and explains the subdued domestic growth due to IRDAI's accounting change for long-term policies.

    asked by Aditi Joshi

    3 min read8 chapters

    Detailed Narrative

    01

    Q1 FY26 Financial Performance Overview

    General Insurance Corporation of India Limited (GIC Re) reported a robust Q1 FY26 performance despite persistent global uncertainties. Profit Before Tax (PBT) surged by 61.04% to INR2,243.54 crores, while Profit After Tax (PAT) increased by 69.08% to INR1,752.22 crores. This strong growth was attributed to underwriting discipline, portfolio optimization, and strategic alignment, enabling the company to navigate market headwinds🌐 effectively.

    02

    Gross Premium Income & Accounting Changes

    Gross premium income for Q1 FY26 was INR12,388.01 crores, a marginal decrease of 0.14% compared to INR12,405.68 crores in Q1 FY25. This slight dip was primarily due to a change in IRDAI's accounting policy for long-term policies, effective October 2024, which now requires premiums to be apportioned over the policy's duration rather than being fully recognized in the first quarter. Management noted that despite this, overall growth is expected for the year.

    03

    Underwriting Performance & Major Losses

    The company significantly reduced its underwriting loss by 29.54% to INR907.76 crores in Q1 FY26, down from INR1,288.53 crores in Q1 FY25. This improvement occurred despite two large extraordinary losses: a fire loss at Jindal Poly Films (GIC's share INR925 crores) and the Air India aviation loss in Ahmedabad. The combined ratio improved by 2.66 percentage points, reaching 106.94% compared to 109.6% in the prior year.

    04

    Investment Income & Strategy

    Gross investment income saw a healthy increase of 18.37% to INR3,228.51 crores in Q1 FY26, up from INR2,727.43 crores in the corresponding quarter last year. The investment book is largely composed of debt (74-75%), ensuring stable interest income. Profit on sale of investments contributed INR1,074 crores for the quarter. Management emphasized that investment sales are driven by strategic market conditions rather than solely to boost the bottom line, maintaining a focus on a safe investment portfolio.

    05

    Solvency, Assets & Net Worth

    GIC Re maintained a robust solvency ratio of 3.85% in Q1 FY26, an increase from 3.36% as of Q1 FY25. Total assets grew by 5.89% to INR197,539.62 crores compared to INR186,552.46 crores in the previous quarter. Net worth also increased by 17.19% to INR45,275.48 crores, and including the fair value change account, net worth stood at INR89,512.55 crores, reflecting a strong and growing balance sheet.

    06

    Outlook & Growth Drivers

    Management provided an optimistic outlook, guiding for an overall growth of 9-10% for the entire year. International business is projected to grow by 17-20% year-on-year, primarily driven by the company's improved credit rating and new business acquisitions. Domestic growth is expected to be around 7-8%, with fire premiums anticipated to be higher than last year. The overall combined ratio is targeted to be around 106.8-107% for the year.

    07

    Impact of IFRS on Financial Reporting

    GIC Re is actively working towards the implementation of IFRS, which will necessitate a shift to market value accounting for investments. This change is expected to be beneficial in the long run, though it will require adjustments in investment management to handle potential market volatility🌐. The company aims to provide both IGAAP and IndAS figures, possibly starting from Q3 FY26, to offer transparency to investors.

    08

    Competition and Market Dynamics

    The company acknowledges the presence of competition from Foreign Reinsurance Branches (FRBs) and other players in the market. However, GIC Re views this competition positively, believing it fosters market development and growth. The strategy remains focused on writing profitable business, leveraging strong relationships with insurance companies, and maintaining significant capacity and staying power, especially in anticipation of Risk-Based Capital (RBC) implementation.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.