A.M. Best Affirms Ratings of General Insurance Corporation of India

HONG KONG--()--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of General Insurance Corporation of India (GIC Re) (India). The outlook for both ratings is stable.

The ratings reflect GIC Re’s strong risk-adjusted capitalization and business profile in its domestic market.

Favorable capital growth has lifted GIC Re’s capital position to INR 419 billion (USD 6.7 billion) at financial year-end 2015 from INR 261 billion (USD 5.8 billion) at financial year-end 2010. Capital growth has been well in excess of insurance risk, which has increased capital buffers. GIC Re continues to have a strong profile in India’s reinsurance market where it remains the dominant player.

Offsetting rating factors include the poor underwriting performance of GIC Re’s overseas business, which accounts for 42% of its gross premiums. Notwithstanding GIC Re’s strong risk-adjusted capitalization, changes in fair value reserves could result in significant volatility due to the company’s high level of equity investments. Regulatory changes could increase competition for GIC Re in its domestic market. However, amendments are still evolving, and the impact on GIC Re remains to be seen.

Positive rating momentum could result from a consistent improvement in GIC Re’s underwriting performance, especially in its overseas business.

Negative rating momentum could result from an unexpectedly large decline in risk-adjusted capitalization as a result of adverse fair value movements and a deteriorating trend in overall results.

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

This press release relates to rating(s) 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.

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

Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

A.M. Best Company, Inc.
Ken Chow, +852 2827 3426
Senior Financial Analyst
ken.chow@ambest.com
or
Moungmo Lee, +65 6589 8412
Managing Director
moungmo.lee@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
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best Company, Inc.
Ken Chow, +852 2827 3426
Senior Financial Analyst
ken.chow@ambest.com
or
Moungmo Lee, +65 6589 8412
Managing Director
moungmo.lee@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
Assistant Vice President, Public Relations
james.peavy@ambest.com