General Insurance Corporation of India

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.

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.

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.

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.

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.

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^📎.

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.