General Insurance Corporation of India Q1 FY27 earnings call

General Insurance Corporation of India (GIC Re) reported a strong start to FY27 with gross premium income growing 8.78% year-on-year to INR13,475.36 crores. The company demonstrated marked improvements in key underwriting metrics, with the incurred claim ratio falling to 85.04% from 90.42% in the prior year, and the combined ratio improving to 104.88% from 106.94%. Profit after tax stood at INR1,922.04 crores, and the solvency ratio strengthened to 4.32 as of June 30, 2026, from 3.85 a year ago, reflecting continued benefits from portfolio actions.

The domestic Indian reinsurance market continues to face competitive pressures, with ample global capacity leading to aggressive pricing. Management acknowledged that the aggressive stance of reinsurers, including new players in GIFT City, contributes to price deterioration. However, the IRDAI issued a directive on July 22, 2026, flagging aggressive rates in the property segment, which GIC Re believes could bring some discipline to the market over the next 2-3 quarters. The company's domestic combined ratio for Q1 FY27 was 107.5%, with a long-term target of 103% within 2-3 years.

GIC Re's international portfolio, which has historically underperformed, is undergoing strategic review with a focus on improving portfolio quality and risk selection. While the overseas combined ratio showed an improvement to 95% in Q1 FY27, management cautioned that a single quarter's results might not fully reflect the ongoing efforts. The company aims to increase its foreign portfolio premium to INR18,000 crores over 3-4 years and achieve a combined ratio of 95% in line with global markets within 2-3 years, prioritizing profitability over aggressive growth.

The life reinsurance segment remains a focus area for GIC Re, despite historical unprofitability, including during the COVID years. Management views the life portfolio as needing to be observed over a cycle of a couple of years rather than short periods, due to its competitive nature and past reserve strengthening. The company is growing its life business, which has a stable market share of around 20%, based on actuarial analysis and not as an experiment.

GIC Re's investment book had a market value of INR157,000 crores as of June 30, 2026. The composition includes 73.4% in fixed income, 17% in equity, and 8.67% in money market instruments. However, the net worth excluding fair value change declined from INR51,000 crores in March 2026 to INR45,000 crores in June 2026. Management clarified that the fluctuations in net worth, particularly the flat trend over the last three years despite profits, are primarily due to market value changes in equity investments.

While GIC Re reported a healthy standalone profit, the consolidated profit for Q1 FY27 was lower due to losses incurred by certain international subsidiaries. Specifically, the South Africa subsidiary reported a loss of INR287 crores, and the Moscow subsidiary recorded a loss of INR29 crores during the quarter. Management indicated that these are early quarter figures and not necessarily indicative of the full year, but they contributed to the lower consolidated operating profit compared to the previous year.