# GIC Re NSE Stake Sale Masks Core Underwriting Losses State-owned reinsurer reports profit drop as flood claims and competitive pressures weigh on performance. - **Source:** [mint - companies](https://www.livemint.com/rss/companies) - **Published:** 2026-11-06 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/d87b1cf2-4271-469c-891a-fef265063cf0 ## NSE Stake Sale Impact General Insurance Corp of India reported a net profit of ₹2,455.62 crore for the September quarter, marking a 14.3% decline year-on-year. This figure was significantly bolstered by a one-time gain of ₹1,082 crore from selling a portion of its stake in the National Stock Exchange during its initial public offering. ## Core Business Underwriting Pressure Excluding the NSE windfall, the company's pre-tax profit would have plummeted by approximately 42% compared to the previous year. The combined ratio, a critical metric measuring claims and expenses against premiums, deteriorated to 110.23% from 109.15%. Underwriting losses for the first half of the fiscal year widened by 38% to ₹1,709.06 crore. ## Catastrophe Claims Surge Recent natural disasters, specifically the Gujarat floods, necessitated a provision of ₹450-500 crore. Chairman Hitesh Joshi noted that losses from eastern India cyclones remain unquantified but expected to be significant. Reinsurers typically face a reporting lag, meaning the full financial impact of these catastrophe events may continue to affect future quarterly results. ## Strategic Shift in Portfolios Health insurance has surpassed fire as the company's largest business segment, now accounting for 27% of gross premiums. This growth is driven by large contracts with standalone health insurers, focusing on the retail rather than group segment. Conversely, the fire insurance segment's share of the portfolio shrank from 32% to 25%. ## International Market Challenges Global operations remain constrained by intense competition and abundant capital, keeping international premiums flat at ₹4,909.16 crore for the first half. While the international combined ratio improved to 108.24% from 119.87%, the portfolio has not yet reached underwriting profitability. Management expects these competitive pressures to persist for at least another year. ## Accounting Standards Transition GIC Re is preparing to shift to Indian Accounting Standards, which will fundamentally change how profitability is reported. The new rules will alter the valuation of liabilities set aside for future claims, potentially making them appear smaller on paper. This transition will render the current combined ratio metric less useful for future investors. ## Future Renewal Outlook The company is looking toward the January renewal cycle for overseas contracts to improve pricing. Management noted that loss trends over the last two to three years have been below long-term averages, which may influence negotiations. Achieving the full-year combined ratio target of 105% remains a goal, though third-quarter catastrophe exposure persists. ## Market and Investor Response Despite the underlying operational challenges and increased claims, GIC Re shares closed at ₹342.90 on the BSE, reflecting a 1.33% gain. Investors appear to be balancing the immediate impact of catastrophe-related underwriting losses against the company's strategic portfolio shifts and the potential benefits of upcoming accounting standard changes in future periods. ## Sources covering this story - https://www.livemint.com/companies/company-results/gic-re-s-nse-windfall-masks-weaker-q2-as-flood-claims-health-push-weigh-11793963292081.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._