GICRE is India's largest reinsurer but continues to make high underwriting losses (FY20 COR: 113.8%). A calibrated approach to underwriting is expected to change this over FY21-23E. While we are not fully convinced about the pathway to underwriting profitability, inexpensive valuations- FY22E P/ABV of 0.6x result in our BUY recommendation with a TP of Rs 185. We estimate an FY22E adj. RoE at 7.4%, and value GICRE at 0.7x FY22E ABV less 10% discount. We continue to rate GICRE a BUY with a TP of Rs 185 (Mar-22E P/ABV of 0.6x). Higher losses in agriculture and aviation led to increased 4QFY20 claims ratio of 89.1%, +1,917/-1,788bps YoY/QoQ. This resulted in underwriting losses of Rs 7.2bn. Investment income was hit by higher provisions of Rs 3.8bn bringing yield down to 7.7%. 4QFY20 APAT was Rs 12.2bn (+37.5% YoY). NEP: Led by healthy growth in property/health i.e., 71.7/17.5% YoY, 4QFY20 NEP grew 43.6% YoY to Rs 76.6bn. For FY20 the company delivered an NEP of Rs 443.5bn (+16.0% YoY).

We rate GICRE a BUY with a TP of Rs 270. We recently met with the management of GICRE and are hopeful that the steps taken- increase in insurance rates for property, and expected lower crop insurance in FY21E, will reduce combined ratios.

GICRE is India's largest reinsurer but continues to make high underwriting losses (9M COR: 116%). While price hikes in property will improve underwriting profits, high proportion of crop business will add to volatility. We estimate an FY22E adj. RoE at 9.9%, and thus value GICRE at 0.9x Dec-21E ABV less 5% discount. We rate GICRE a NEUTRAL with a TP of Rs 264. Higher losses in agriculture and property led to increased claims ratio i.e. 107.0%, +2,379/-274bps YoY/QoQ; this resulted in highest (since listing) underwriting losses of Rs 27.4bn. 3QFY20 reported loss was at Rs 10.4bn!

GICRE is India's largest reinsurer but continues to make high underwriting losses mainly in its foreign operations (1H:125%). We thus remain concerned of company's plans to increase foreign business. We estimate an FY22E adj. RoE of just 10.0%, and with stable growth we can at best assign a valuation of just 0.8x Sep-21E ABV. Given recent run up in price, we downgrade the stock to NEUTRAL with an unchanged TP of Rs 250 (0.8x Sep-21E ABV). GICREs 2QFY20 saw a NEP increase 7.5% YoY to Rs 118.6bn; COR (calc.) declined 208bps YoY to 125.1%. High COR in foreign operations is a concern, as GICRE failed yet again to meet its guidance of lower COR.

Background: GIC Re offers reinsurance services in businesses such as fire (property), marine, motor, engineering, agriculture, aviation, health, liability, credit and financial liability, and life insurance. The company had a monopoly for 16 years until the insurance market was open to foreign reinsurance players. Its only Indian competitor is ITI Reinsurance Ltd (unlisted), which commenced its operations earlier this year. With over 44 years of experience in the insurance industry, its management has created a strong balance sheet with diversified revenue streams & investments generating effective yields. It also has a robust and comprehensive risk management framework. The...

Issue Open: October 11 - October 13 2017, Price Band: Rs. 855 - 912 (A discount of Rs 45 is offered to investors in retail Category and to the Eligible Employees) Issue Size: 124,700,000 Equity Shares (Fresh Issue of 17,200,000 eq sh. Offer for sale of 107,500,000 eq sh) Offer Size: Rs.10661 - 11372 crs Issue Open: October 11 - October 13 2017

In terms of gross premiums accepted in FY17, General Insurance Corporation of India (GIC) is the largest reinsurance company in India, and it accounted for approximately 60% of the premiums ceded by Indian insurers to reinsurers. The company is also an...

Incorporated in 1972, General Insurance Corporation of India (GIC) is the largest reinsurance company in India in terms of gross premiums. They provides various general insurance products like property, energy, marine, engineering, miscellaneous, aviation-hull/spares-rotor wing, aviation-hull/ spares-fixed wing, liability, aviation treatyhull, spares and liability insurance products. They also offer cargo and offshore energy, motor, life, agriculture, space, health, credit and financial insurance. They offer reinsurance solutions for the Afro-Asian region and reinsurance programs in South East Asia, the Middle East and Africa. They develop their overseas business through their home office in Mumbai, branch offices in London, Dubai and Kuala Lumpur, a representative office in Moscow, a subsidiary in the United Kingdom that is a member of Lloyd's of London and a subsidiary in South Africa. Objectives of issue: The issue consists of an offer for sale of 107.5 million shares and a fresh...

terms of gross premiums accepted and manages Rs391.3 billion of Indian investment assets. It is also an international reinsurer that underwrites business from162countries.Itenjoysstrongcapitalpositionwithsolvencyratioof2.4x.The promotersarecomingoutwithanofferforsaleofaroundRs98bnandfreshissue ofRs15.7bnwithdilutionof14.2%atapricerangeofRs885912.Attheupperband ofRs912,thecompanytradesat27.4xMar17EPSwhichwebelieveisfairlypriced, but given the liquidity in the markets and company's performance in the recent...

Background: GIC Re offers reinsurance services in businesses such as fire (property), marine, motor, engineering, agriculture, aviation, health, liability, credit and financial liability, and life insurance. The company had a monopoly for 16 years until the insurance market was open to foreign reinsurance players. Its only Indian competitor is ITI Reinsurance Ltd (unlisted), which commenced its operations earlier this year. With over 44 years of experience in the insurance industry, its management has created a strong balance sheet with diversified revenue streams & investments generating effective yields. It also has a robust and comprehensive risk management framework. The company is a significant global player, having...

General Insurance Corporation of India (GIC) is the largest reinsurance company in India in terms of gross premium accepted in FY17, and accounted for approximately 60% of the premiums ceded by Indian insurers to reinsurers during FY17, according to CRISIL Research. GIC is also an international reinsurer that underwrote business from 161 countries as at June 30, 2017. According to CRISIL Research, GIC was ranked as the 12th largest global reinsurer in 2016 and 3rd largest Asian reinsurer in 2015, in terms of gross premium accepted. GIC provides reinsurance across many key business lines including fire (property), marine, motor, engineering, agriculture, aviation/space, health, liability, credit and financial and life insurance. Its net...

General Insurance Corporation of India (GIC Re) is the largest reinsurer company in terms of gross premium (GP) accepted, having a market share of 60% in India. GIC Re provides reinsurance across key business lines including fire (property), marine, motor, engineering, agriculture, aviation, health, liability & credit, etc. Outlook &a..

53.75 fair value of Rs.73,902.56 cr. The yields (without unrealized gains) from the Indian Post Issue Equity Capital (Rs. Cr.) 438.60 investment assets in FY17, FY16 and FY15 were 12.35%, 12.91% and 14.08%, respectively. As of June 30, 2017, the investment income and yields (without unrealized Total Issue as % of total capital...

Incorporated in 1972, General Insurance Corporation of India is the largest reinsurance company in India in terms of gross premiums, having a market share of 60% in India. It provides various general insurance products like property, energy, marine, engineering, miscellaneous, aviation-hull/spares-rotor wing, aviation-hull/spares-fixed wing, liability, aviation treatyhull, spares and liability insurance products. It also offers cargo and...

GIC Re is the largest reinsurance company in India in terms of gross premiums accepted in FY17, and accounted for ~60% of premium ceded by Indian insurers to reinsurers. In addition, the company's international business accounted for ~30.53% of premium in FY17. According to Crisil Research, GIC Re was ranked 12th largest global reinsurer in 2016 and third largest Asian reinsurer in 2015, in terms of gross premiums accepted. The company provides reinsurance across many key business lines including fire (property), marine, motor, engineering, agriculture,...

General Insurance Corporation (GIC) is the largest reinsurance company in India in terms of gross premiums accepted in FY17, and accounted for approximately 60% of the premiums ceded by Indian insurers to reinsurers during FY17, according to CRISIL Research. The company is also an international reinsurer that underwrote business from 162 countries as at 31 March 2017. According to CRISIL Research, it ranked as the 12th largest global reinsurer in 2016 and the 3rd largest Asian reinsurer in 2015, in terms of gross premiums accepted. GIC provides reinsurance across many key business lines including...