General Insurance Corporation of India (GIC Re), the national reinsurer, registered a profit after tax of Rs 3,127 crore in 2016-17, an increase of 9.8% over the previous year, largely due to the crop insurance and growth in the investment income. The net worth of GIC Re stood at Rs 47,983 crore as against Rs 38,281 crore, which includes fair value change account registering a growth of 25.3%. Senior officials in the industry stated that if government decides to dilute 25% of the stake in the company, they can raise around Rs 11,995.75 crore from the initial public offering (IPO).
“I would like to say that IPO is a welcome step and it shows the commitment of government to reforms. Having said that, we have kick-started the process of IPO and have appointed merchant bankers and legal counsels. Apart from that, I can’t offer any more comments on the issues as we are in process of IPO. We are waiting for clearance from the government as to what will be the initial tranche, but it will be disinvestment of 25% over three years,” said Alice Vaidyan, chairman-cum-managing director at General Insurance Corporation of India. She declined to comment on exact time frame of launch and the valuations of its IPO.
GIC Re has selected five merchant bankers which are Citi Group Global Markets, Axis Capital, Kotak Mahindra Capital, Deutsche Equities India and HSBC Securities and Capital Markets. In the last financial year, GIC Re’s total premium income grew 82.2% at Rs 33,585 crore from Rs 18,486 crore a year ago. The premium split between the domestic and the overseas business during fiscal 2017 was 69% and 31% respectively.
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In the last fiscal, GIC Re registered a lower combined ratio of 99.7% in the reporting year from 107.4% in the previous year. GIC Re has declared a dividend of Rs 1,002 crore for the year, which is a 17% increase over the previous year. While their investment income for policy holder funds stood at Rs 3,053 crore in 2016-17 from Rs 2,803 in 2015-16, their investment income for shareholders funds stood at Rs 1,533 crore in last fiscal from Rs 1,3250 in 2015-16.
GIC Re received premiums of Rs 9,744 crore for crop segment and it leads agri treaties of 15 of 18 insurance companies. GIC Re now is the largest agriculture re-insurer globally.