Page 6 - Insurance Times September 2021

ICICI Lombard reports de- The policy is an attempt by the govern- "GIC Re has decided to continue the
ment to boost automobile demand activity/ operations relating to Dubai
cline in net profit that has been hit by weak consumer branch from GIFT City, India," it said.

Private sector general insurer ICICI sentiment amid a slowdown in the The board of GIC Re also accorded its
Lombard has reported a 62 per cent broader economy. approval and to carry out suitable
decline in net profit at Rs 151.63 crore "The new scrappage policy is an impor- statutory requirements if any on July 7,
in April-June quarter of FY22 as its un- tant link in the circular economy and 2021 by a circular resolution. UAE's
derwriting losses mounted on account the waste-to-wealth campaign. This Insurance Authority merged with the
of higher Covid claims. policy also reflects our commitment to Central Bank of the UAE earlier this
In the April-June quarter, the insurer reduce pollution in the cities of the year.
posted an underwriting loss of Rs country and protect the environment "Effective July 3, 2021, the Dubai
and fast development. This policy, by
508.16 crore against an underwriting branch of GIC Re will no longer under-
following the principle reuse, recycle
profit of Rs 38.16 crore in the year-ago write business under its operations.
and recovery, will also promote the
period. In the March quarter, it had However, the branch will continue to
reported an underwriting loss of Rs country's self-reliance in the auto sec- service the underwriting and claims run
tor and in the metal sector," Modi said
91.29 crore. off from the business underwritten
at an investor summit in Gujarat.
The combined ratio of the insurer prior to July 3," GIC Re said in a letter
The summit is being organized to invite
stood at 121.3 per cent in Q1 against investment for setting up vehicle scrap- to its business partners.
99.7 per cent in Q1 FY21, primarily ping infrastructure under the voluntary
driven by Covid-19 impact. The impact vehicle-fleet modernization Madras High Court makes
on the health book of the insurer was programme. It will also focus on the "bumper-to-bumper" in-
to the tune of Rs 602 crore in Q1 synergies presented by the ship-break- surance mandatory
against Rs 20 crore in the year-ago ing industry at Gujarat's Alang for the In a significant order, the Madras High
quarter and Rs 339 crore in FY21. development of an integrated scrap- Court has ruled that "bumper-to-
The gross direct premium income of ping hub. bumper" insurance should be manda-
the insurer stood at Rs 3,733 crore in tory whenever a new vehicle is sold,
April-June quarter, up 13 per cent from GIC puts Dubai branch in from September 1.
Rs 3,302 quarter in the year-ago pe- runoff mode This must be in addition to covering the
riod. The solvency of the insurer at the driver, passengers and owner of the
end of June quarter was 2.76x against GIC Re, seventh largest non-life rein- vehicle, for a period of five years.
2.90x on March 31, 2021, and higher surer globally, has decided to put its Thereafter, the owner of the vehicle
than the minimum regulatory require- Dubai branch into run off mode as the must be cautious in safeguarding the
ment of 1.50x. Dubai authority has not renewed the interest of driver, passengers, third
licence issued to the company. The
parties and himself/herself, so as to
reinsurer will now run the Dubai busi-
Vehicle scrappage policy avoid unnecessary liability being foisted
ness from the GIFT City IFSC in
to generate new invest- Ahmedabad. on the owner of the vehicle, as beyond
five years, as on date there is no pro-
ments "During the quarter ended June 21, vision to extend the bumper to bumper
Prime Minister Narendra Modi said GIC Re decided to place its Dubai policy, due to its non-availability, Jus-
India's new vehicle scrappage policy branch into run off because of non-re- tice S Vaidyanathan said in a recent
has the potential to generate fresh newal of license by Dubai authority, order.
investments of more than Rs. 10,000 non-compliance in solvency require- The judge was allowing a writ petition
crore, creating thousands of jobs. ment etc," GIC Re said in a stock ex- from the New India Assurance Company
Finance minister Nirmala Sitharaman change filing. The decision to place the Limited in Avalpoondurai, challenging
announced the policy in her February Dubai Branch into run off, has been the orders dated December 7, 2019 of
budget for FY22 to phase out unfit, informed to insurance regulator IRDAI the Motor Accidents Claims Tribunal,
polluting vehicles. vide letter dated July 6, 2021, it said. Special District Court in Erode.

6 The Insurance Times, September 2021