Now Is The Right Time To Focus On Growth, Says GIC Re Chairman — NDTV Profit Exclusive

Ramaswamy Narayanan, chairman and managing director of GIC Re. (Source: Vijay Sartape/NDTV Profit)

General Insurance Corp. of India is all set to focus on growth, according to Chairman and Managing Director Ramaswamy Narayanan.

Over the last five years, the company has gone from a loss to making profits. "We have weeded out businesses that were not working for us both internationally and domestically," Narayanan told NDTV Profit.

"It is now the right time for us to start focusing on growth," he said. The company's solvency ratio has also gone up from 1.53 in 2020 to 2.94 currently, allowing it to look for opportunities in the market and write good premium business on account of the buffer capital, he said.

Narayanan expects better growth and profitability in FY25, as with the current renewal cycle, the company is looking to write more business. "We are bullish about the business and how insurers are writing their books."

Combined Ratio Outlook

GIC Re intends to exit FY24 at a combined ratio of 112–113% on the back of a good Q4. While FY23 ended at a 109% combined ratio, two natural calamities in the October-December quarter this year increased the 9M FY24 combined ratio to 117%, the top executive said.

On a long-term basis, the company intends to reduce the combined ratio by 1% each year, he said.

Business And Margin Profile

70% of the total business comes from India, while 30% is from international markets, for diversification of business risk.

For GIC Re, property reinsurance yields the highest margins and is also its biggest business class. From a higher margin perspective, specialty classes like liability and sometimes marine come second, Narayanan said.

Motor and health businesses are currently not very profitable, he said. But with more people buying health, loss ratios could get better.

Divestment Plans

The company just completed its international roadshows after domestic roadshows in October last year. Because of a lack of peers in the domestic market, investors were not tracking the business, but the response to roadshows has been generating a lot of interest, Narayanan said.

"As a company, we don't need capital," he said. However, the government could consider divesting the remaining 10.8% stake, according to him. As per SEBI guidelines, the public shareholding of a listed entity should be at a minimum of 25%.

But no timeline for the same has been discussed, the chairman said.

Apart from this, the company is "not a typical PSU" and has a lean employee structure, Narayanan said. Large deployable capacity, not writing businesses that would negatively impact the bottom line and a great relationship with insurers are all expected to augur well for the company.

Last year in March-end, GIC Re shares charted a 52-week low of Rs 127.80 apiece. It hit a high of Rs 467 in February 2024.