IMPACT OF FIRE RATE INCREASES ON GIC RE PERFORMANCE

GIC RE Domestic fire earned premium in 2018-19 was INR 22150 million. This increased to INR 31910 million in 2019-20. The increase is 44%. In the year 2020-21, it further increased to INR 47130 million, an increase of 48%.

For the years 2021-22, 2022-23 and 2023-24 the domestic earned premiums were INR 50280 million, INR 51490 million and INR 54900 million respectively. The premium increases as a percentage were 7%, 2% and 7% respectively.

In 2018-19, the domestic fire loss ratio was 94%. In 2019-20 the loss ratio improved to 79% which further improved to 65% in 2020-21.

The fire loss ratios for 2021-22, 2022-23 and 2023-24 were respectively 69%, 66% and 95%.

So, with the latest rate increases, we can expect a dramatic improvement in the topline and bottom-line of GIC RE.

Is it time to buy GIC RE stock? In the last two months, share price already increased by 25% despite the fact that the index had a negative bias in these two months.

Market discounts the future. It has better idea about the future happenings than those of us in the industry.