A.M. Best Affirms Ratings of General Insurance Corporation of India (GIC Re) (2019)
A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of General Insurance Corporation of India (GIC Re) (India). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect GIC Re’s balance sheet strength as very strong, supported by its risk-adjusted capitalization being at the strongest level, a liquid investment portfolio and a retrocession panel of excellent credit quality. GIC Re also benefits from a sizeable capital base allows the company to absorb a variety of insurance market stresses.
GIC Re’s operating performance is assessed as adequate.
GIC Re relies heavily on investment income derived from its large investment portfolio to generate positive earnings.
The favorable business profile assessment reflects the company’s pre-eminent market position in India. In addition, GIC Re maintains a geographically diversified underwriting portfolio.
The company’s ERM is viewed as appropriate given the current size and complexity of its operations.
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Care Reaffirms Rating to The Claim Paying Ability of General Insurance Corporation Of India (GIC Re) (2019)
CARE reaffirms AAA (In) Claims Paying Ability rating of General Insurance Corporation of India (GIC Re) with Stable outlook.
The rating continues to factor in General Insurance Corporation of India’s (GIC Re) majority ownership by Government of India (GoI), GIC Re’s strategic importance as the dominant Indian reinsurer with good solvency position, comfortable liquidity profile, moderation in asset quality and moderate profitability. Ownership by GOI, solvency position and profitability are key rating sensitivities.
GIC Re’s credit profile derives strength from strong parentage with GOI holding 85.78% shareholding with strategic importance as a dominant Indian reinsurer in the domestic market.
The solvency position continues to remain strong, with GIC Re reporting a solvency margin of 1.72 times as on March 31, 2018.
Government securities and other approved securities continue to form the largest component of investments followed by equity. Substantial portion of GIC Re’s investment is readily marketable thereby extending it ample liquidity support.
GIC Re accepts almost all classes of non-life re-insurance business from the public and private sector general insurance companies in India along with obligatory cessions. GIC Re also accepts reinsurance from overseas markets with a view to reduce dependence on domestic business to further diversify the geographical concentration of its book and increased retentions by the domestic insurers..
Losses at underwriting level impacted due to major catastrophic events across the world, however, company reporting healthy profits on account of income from investments.