Friday, March 2, 2018

A.M. BEST AFFIRMS CREDIT RATINGS OF GENERAL INSURANCE CORPORATION OF INDIA

SINGAPORE, March 1 (Bernama-BUSINESS WIRE) -- 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, which A.M. Best categorizes as very strong, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management.

GIC Re’s balance sheet strength reflects solid risk-adjusted capitalization that is supported by modest underwriting leverage compared with other global reinsurers. Its capital and surplus is sizable, standing at INR 485 billion (USD 7.5 billion) as of March 31, 2017.

The favorable business profile reflects the company’s solid market position in India. GIC Re is the country’s main reinsurer and holds a significant share of the reinsurance market. It continues to have close relationships with direct insurers in India, and regulations give it an advantage in obtaining reinsurance placements. In addition, GIC Re maintains a geographically diversified underwriting portfolio with access to a sizable amount of business outside of India.

An offsetting rating factor is the potential strain on GIC Re’s risk-adjusted capitalization due to increasing underwriting leverage, partly attributable to rapid growth in crop premiums. As part of a nationwide effort by India’s government to extend insurance coverage to farmers, crop insurance now comprises a substantial proportion of the market. GIC Re retains most of the risks pertaining to crop insurance. Additionally, because equities form a considerable proportion of the company’s investment portfolio, its capital and surplus could be volatile in times of stock market turbulence.

GIC Re is well-positioned at its current rating level. Negative rating momentum could result from material deterioration in the company’s risk-adjusted capitalization or operating performance.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
 
Contacts
A.M. Best
Wesley Chia, +65 6303 5018
Financial Analyst
wesley.chia@ambest.com
or
Chi-Yeung Lok, +65 6303 5016
Director, Analytics
chi-yeung.lok@ambest.com
or
Christopher Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1 908 439 2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com
 
Source: A.M. Best
 
View this news release online at:
http://www.businesswire.com/news/home/20180228006187/en

--BERNAMA

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