Page 9 - Insurance Times September 2020

end, the health segment may be far justed combined ratio of the firm stood buy a health insurance protection us-
ahead of the motor segment. at 105.88 per cent, against 97.24 per ing it.
cent.
The usage period of the gift card
GIC Re slips into the red The combined ratio measures the would be six months from the date of
with Q1 loss at Rs. 811 cr money flowing out of an insurance firm purchase and is refundable if unused.
in the form of dividends, expenses, and
India's largest reinsurer, General Insur- Rakesh Jain, CEO, Reliance General
ance Corporation (GIC Re), recorded a losses. Losses indicate the insurer's dis- Insurance said, "In India, gifts are like
cipline in underwriting policies. A ratio
pre-tax loss of Rs 811.22 crore in the blessings, a small token on every fes-
first quarter, compared to a pre-tax below 100 per cent indicates that the tive or celebratory occasion is a way to
profit of Rs 138.90 crore in the corre- firm is making an underwriting profit, express care towards our loved ones.
sponding period of the previous year. while a ratio above 100 per cent And this year with the pandemic
In the previous quarter, the reinsurer means that it is paying out more around, people are more concerned
had reported a pre-tax profit of Rs money in claims that it is receiving in about the health of their friends and
1,101 crore. the form of premiums.
family, so what can be better than gift-
Its net loss in Q1FY21 stood at Rs ing protection of health insurance."
557.46 crore, compared to a net profit Reliance General launches
of Rs 108.59 crore in Q1FY20. GIC Re's insurance gift card under LIC, GIC, New India Assur-
gross premium income in Q1FY21
dropped 24 per cent to Rs 15,881.55 sandbox guidelines ance identified as D-SIIs
crore, compared to Rs 20,813.12 Reliance General Insurance has The Life Insurance Corporation of India
crore. It, however, recorded a 25.3 per launched 'Insurance Gift Card' which (LIC), General Insurance Corporation of
cent growth in the fire insurance seg- will enable buyers to gift an insurance India and The New India Assurance Co
ment in Q1FY21 - with Rs 3,925.92 product. have been identified as Domestic Sys-
crore of premiums collected compared temically Important Insurers (D-SIIs)
to Rs 3,134.14 crore in Q1FY20 - as The product has been approved under for 2020-21 by insurance regulator
other segments such as motor, health, the sandbox guidelines of the Insur- IRDAI.
agriculture, and marine saw contrac- ance Regulatory and Development
tion in premiums. Authority of India (IRDAI). The com- Given the nature of operations and
pany said in a statement that the prod- their systemic importance, the three
Its investment income for the report- public sector insurers have been asked
uct is designed keeping in mind the
ing quarter dropped 18.5 per cent to to raise the level of corporate gover-
Rs 1,142.83 crore, compared to Rs gifting scenario in India during the fes- nance as well as identify all relevant
1,401.90 crore. tive season.
risk and promote a sound risk manage-
"The global scene for the insurance So far, no such insurance gift cards exist ment culture.
industry for FY21 has shown weak in the Indian market.
trends due to the Covid-19 situation. Under the sandbox method, entities The D-SIIs will also be subjected to
Even though GIC Re has maintained its can launch and test a product with a enhanced regulatory supervision, the
prominent position in the sector, there select group of people for a period of Insurance Regulatory and Develop-
has been a reduction in business in Q1 six months. ment Authority of India (IRDAI) said.
because of strategic reduction of risk According to the regulator, D-SIIs re-
acceptance and a fall in overall direct This will work as a prepaid card and is fer to insurers of such size, market
premiums in India. GIC Re, however, available with denominations of Rs 500 importance and domestic and global
expects to see rebound in business in and Rs 1,000. The card can be pur- inter connectedness whose distress or
the coming quarters," the firm said. chased from the company website. failure would cause a significant dislo-
Underwriting losses expanded to Rs Once the card is purchased online, cation in the domestic financial sys-
1,771.35 crore in Q1FY21, against Rs there will instructions to redeem the tem. Thus, the continued functioning
854.37 crore in Q1FY20, while com- voucher that is received. This card can of D-SIIs is critical for the uninter-
bined ratio rose to 112.16 per cent, be shared electronically with the per- rupted availability of insurance services
compared to 102.63 per cent. Ad- son you're gifting it and the bearer can to the national economy. T

8 The Insurance Times, September 2020