Favorable capital growth has lifted GIC Re`s capital position to ₹ 419 Billion (US$ 6.7 Billion) at financial year - end 2015 from ₹ 261 Billion (US$ 5.8 Billion) at financial year end 2010. Capital growth has been well in excess of insurance risk, which has increased capital buffers. GIC Re continues to have a strong profile in India`s reinsurance market where it remains the dominant player.
Offsetting rating factors include the poor underwriting performance of GIC Re`s overseas business, which accounts for 42% of its gross premium. Notwithstanding GIC Re`s strong risk-adjusted capitalization, change in fair value reserves could result in significant volatility due to company`s high level of equity investments. Regulatory changes could increase competition for GIC Re in its domestic market. However amendments are still evolving, and the impact on GIC Re remains to be seen.
Positive rating momentum could result from a consistent improvement in GIC Re`s underwriting performance, especially in its overseas business.
Negative rating momentum could result from an unexpectedly large decline in risk adjusted capitalization as a result of adverse fair value movements and a deteriorating trend in overall results.
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GIC Re is wholly owned by GoI and it is the sole national reinsurer. Apart from the domestic operations, GIC Re has overseas offices namely, representative office in Moscow and branch offices in London, Dubai and Malaysia. GIC Re also has presence in Bhutan through its joint venture, GIC Bhutan Re (GIC Re holds 26% stake) and in South Africa through its wholly owned subsidiary, GIC Re South Africa Limited. GIC Re is present in various segments of which major segments are fire, health, motor and marine.
GIC Re reported a PAT of Rs.2,694 crore on Gross Premium Written (GPW) of Rs.15,184 crore in FY15 as against a PAT of Rs.2,253 crore on GPW of Rs.14,680 crore during FY14. Of the total GPW of Rs.15184 crore, 57% is attributable to domestic business and 43% to foreign business. In 9MFY16, the company reported a PAT of Rs.1,637 crore on Gross Premium Written of Rs.12,671 crore. Solvency margin stood at 3.04 times as on March 31, 2015 and at 3.52 times as on December 31, 2015.