General Insurance Corporation of India — Q2 FY26 earnings call

Call held 17 Nov 2025

Management summary

GIC Re delivered robust financial performance in Q2 FY26, marked by strong premium and profit growth, and improved underwriting metrics. The solvency ratio also saw a healthy increase. While the life business combined ratio remains elevated due to past pricing and reserve strengthening, management expects normalization soon. The company is strategically focused on balancing domestic and international portfolios and leveraging its restored credit rating.

Highlights

  • Gross premium income for Q2 FY26 increased 14.12% YoY to INR 9,601.70 crores.

  • Profit after tax for Q2 FY26 grew significantly by 54.06% YoY to INR 2,866.79 crores.

  • The combined ratio improved to 109.15% in Q2 FY26 from 114.05% in Q2 FY25, driven by firmer pricing and favorable claims.

  • Solvency ratio strengthened to 3.85 as of September 2025, up from 3.42 in September 2024.

  • Net worth excluding fair value change increased 18.20% YoY to INR 46,669.38 crores as of September 2025.

Concerns

  • Life business combined ratio remained high at ~114% due to reserve strengthening and adverse mortality experience, expected to normalize in 2-3 quarters.

  • Operational expenditure increased by approximately INR 60 crore due to a one-off, disputed VAT demand in a foreign jurisdiction.

Key financials

  1. Gross Premium Income ₹9,601.7 Cr +14.1%YoY
  2. Investment Income ₹3,791.67 Cr +8.8%YoY
  3. Incurred Claim Ratio 81.5%
  4. Combined Ratio 109.2%
  5. Profit After Tax ₹2,866.79 Cr +54.1%YoY
  6. Solvency Ratio 3.85
  7. Net Worth (excl. FV Change) ₹46,669.38 Cr +18.2%YoY
  8. Fair Value Change Component ₹42,039.82 Cr

What they filed

Q1 FY27: revenue down 1.5%, net profit down 31.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue12,378 11,144 13,209 14,623 12,755 +3%12,589 +13%13,018 −1%14,401 −2%
EBITDA2,380 1,929 2,998 2,605 2,762 +16%2,366 +23%2,463 −18%2,021 −22%
Net profit1,856 1,677 2,499 2,531 2,874 +55%1,726 +3%2,533 +1%1,744 −31%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Premium
₹21,989.71 Cr Total
  • Domestic Premium (H1 FY26) ₹17,080.66 Cr 77.7%
  • International Premium (H1 FY26) ₹4,909.05 Cr 22.3%

Guidance & targets

Portfolio Mix

  • Domestic vs Foreign Business Mix Portfolio Mix · Medium-term · Medium confidence 60:40 (Domestic:Foreign)
    From a medium-term perspective, GIC's objective has been to achieve domestic versus foreign of 60 to 40.

    — Hitesh Joshi

Profitability

  • Life Loss Ratio Profitability · Next 2-3 quarters · Medium confidence ~100%
    And you will see a similar kind of trend, loss ratio about 100% in the coming 2 or 3 quarters.

    — Suresh Sindhi

Revenue

  • Domestic Premium Growth Revenue · Ongoing · Medium confidence Mirror Indian reinsurance market growth
    See, the thing is, as we have been mentioning that as far as Indian market is concerned, our growth will mirror the growth of the Indian reinsurance market.

    — Hitesh Joshi

  • International Premium Growth Revenue · Ongoing, post-January '26 renewal · Medium confidence Double-digit growth
    So on a relatively, say, if I might use the word small base of say 22% of foreign business, it might see a double-digit growth.

    — Hitesh Joshi

Operations

  • January Renewal Business Booking Timeline Operations · Next 6 to 8 quarters · High confidence Over 6 to 8 quarters
    But then that January business will get booked over a period of next 6 to 8 quarters.

    — Hitesh Joshi

What to watch in Q3 FY26

Life Business Combined Ratio

Next 2-3 quarters
Current ~114%
Target ~100%

Why it matters

To verify the effectiveness of reserve strengthening and the normalization of profitability in the life business segment.

And you will see a similar kind of trend, loss ratio about 100% in the coming 2 or 3 quarters.

Risks & concerns

  • Macroeconomic uncertainty, inflationary pressures, and geopolitical risk

    medium

    These factors continue to influence pricing conditions and capital deployment across the reinsurance sector.

    Management acknowledged

  • Growing incidence of climate-related events

    medium

    Continues to shape pricing conditions and capital deployment, necessitating refined models and exposure frameworks.

    Management acknowledged

  • Adverse mortality experience in life business

    medium

    Led to reserve strengthening and a higher combined ratio, with normalization expected in 2-3 quarters.

    Analyst acknowledged, being addressed

  • Market softening in key lines

    low

    While some market softening is observed, underwriting discipline is being maintained.

    Management acknowledged

  • One-off VAT demand in a foreign jurisdiction

    low

    Caused an increase of approximately INR 60 crore in operational expenditure, which management considers unjustified and is appealing.

    Management acknowledged, appealing

Q&A highlights

4 direct, 1 evasive
Optimal underwriting mix (domestic vs overseas) and capital deployment strategy. Direct
From a medium-term perspective, GIC's objective has been to achieve domestic versus foreign of 60 to 40. ... we will continue to choose our way through risk selection to move in this broader direction of 60-40.

Clarifies the company's strategic long-term portfolio composition target and its flexible approach to achieving it based on market dynamics.

Asked by MW Kim

Risk management improvement and outlook for January 2026 renewal season post-rating restoration. Direct
I think reset will be a very strong and harsh word to frame the situation which might emerge due to any change in obligatory. We are fairly confident that we'll sail through smoothly due to any change in this.

Addresses concerns about potential impacts of regulatory changes (obligatory cession) and expresses confidence in navigating upcoming renewals leveraging the restored A- rating.

Asked by MW Kim

Explanation for the high combined ratio in the life business (114%) and adverse mortality experience. Direct
The primary reason is strengthening of our resource. And last time also, we discussed that. And you will see a similar kind of trend, loss ratio about 100% in the coming 2 or 3 quarters. The reason being we priced some of the products long time back.

Provides a clear explanation for the elevated life combined ratio, attributing it to past pricing and current reserve strengthening, with a specific timeline for expected normalization.

Asked by Avinash Singh

Outlook on segment-specific growth (fire, health) and overall gross premium growth for the next two years. Partial
I would like to say that broadly our growth in the segment should mirror the market growth to a great extent, health is a class, which doesn't necessarily require reinsurance, but there can be treaties, which are trying to optimize the capital structure of a particular insurance company.

Indicates that GIC Re's growth in specific segments like health will largely track the broader market and highlights the role of treaties in capital optimization rather than direct reinsurance needs.

Asked by Harsh Shah

Prospects for a credit rating upgrade (from A to A+) given the improved solvency ratio. Evasive
I think it will be a while before we can pitch for that because it involves a certain more stringent evaluation of the entire operations... So presently, it is not really a target for us because it requires, as I said, also higher capital adequacy.

Clarifies that despite improved solvency, a rating upgrade is not an immediate focus, citing the need for broader operational and capital adequacy enhancements beyond the IRDAI formula.

Asked by Karthikeyan K

Reason for the increase in operational expenditure during the quarter. Direct
Yes. There is one particular demand on the value-added tax in a foreign jurisdiction on our branch, which we feel is absolutely unjustified, and we are going into appeal. So that is the figure which is distorting to the extent of something like INR60 crore, that is jacking up our EOM to that extent.

Identifies a specific, one-off and disputed foreign VAT demand as the primary cause for the increase in operational expenditure, suggesting it's not a recurring issue.

Asked by Karthikeyan K

Expectation for gross premium growth in the second half of the current financial year. Partial
If there is a bump in the direct side, it will definitely result into some domino effect on reinsurance side.

Reinforces that GIC Re's premium growth is largely contingent on the performance and growth of the primary insurance market, especially after the GST impact.

Asked by Harsh Shah

3 min read 7 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

GIC Re reported a robust Q2 FY26, with gross premium income growing 14.12% YoY to INR 9,601.70 crores, up from INR 8,413.49 crores in the prior year. Investment income also increased by 8.84% YoY to INR 3,791.67 crores. Profit after tax saw a significant surge of 54.06% YoY, reaching INR 2,866.79 crores compared to INR 1,860.75 crores in Q2 FY25. The company's solvency ratio improved to 3.85 as of September 2025, up from 3.42 in September 2024, reflecting a stronger capital position.

Underwriting Performance and Combined Ratio Improvement

The company demonstrated improved underwriting discipline, with the incurred claim ratio decreasing to 81.5% in Q2 FY26 from 93.6% in the corresponding quarter of the previous year. This led to a notable improvement in the combined ratio, which stood at 109.15% compared to 114.05% YoY. The adjusted combined ratio for the first half of FY26 also improved to 84.04% from 88.86% in the previous year, indicating firmer pricing and a more favorable claims experience in core segments.

Premium Mix and Growth Drivers

For the first half of FY26, domestic premium contributed INR 17,080.66 crores, growing by 4.6%, while international premium stood at INR 4,909.05 crores, growing by 9.4%. The current premium split is 78% domestic and 22% international. Management's medium-term objective is to achieve a domestic to foreign business mix of 60:40, which will be pursued through disciplined risk selection and portfolio optimization, adapting to dynamic pricing environments.

Life Business Performance and Reserve Strengthening

The life business segment recorded a combined ratio of approximately 114%, primarily due to reserve strengthening for products priced long ago and adverse mortality experience. Management indicated that this is a continuous process of adjusting resources based on evolving loss trends. They anticipate the life loss ratio to normalize to around 100% over the next 2-3 quarters as these adjustments are completed.

Capital Adequacy and Credit Rating Perspective

Despite the improved solvency ratio of 3.85 and an 18.20% YoY increase in net worth (excluding fair value change) to INR 46,669.38 crores, management stated that a credit rating upgrade from the current A- is not an immediate target. They explained that achieving a higher rating requires a more stringent evaluation of overall operations and higher capital adequacy beyond the IRDAI formula-based calculations, which primarily consider book value rather than market value.

Operational Expenditure and One-off Items

The increase in operational expenditure during the quarter was attributed to a specific, one-off demand of approximately INR 60 crore for value-added tax in a foreign jurisdiction. Management clarified that they consider this demand unjustified and are in the process of appealing it. This indicates that the increase is not reflective of a recurring operational cost trend but rather an exceptional item.

Outlook on Renewals and Market Conditions

Management expects to leverage the recently restored A- rating during the January 2026 renewal season, which could lead to double-digit growth in the international business, although the booking of this business will be spread over 6-8 quarters. They anticipate that overall growth will mirror the Indian reinsurance market's performance. Despite some market softening, GIC Re remains committed to disciplined underwriting and strategic execution to navigate competitive landscapes and capitalize on emerging opportunities.

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