General Insurance Corporation of India Management Discussions

ECONOMIC OVERVIEW Global Economy

The global economy demonstrated measured resilience in 2024, with growth estimated at 3.1%, according to the International Monetary Fund (IMF). While this pace remains below pre-pandemic averages, it reflects a steady recovery from recent inflationary shocks and policy tightening cycles. Key drivers of this performance included easing inflationary pressures, normalization in commodity prices, and broadly resilient labour markets. Among advanced economies, the United States maintained robust momentum, supported by strong consumer spending and improved price stability. Emerging markets and developing economies (EMDEs) also saw relatively stable growth, reinforced by firm domestic demand and favourable external conditions. However, the Eurozone continued to face headwinds from weak industrial output and elevated borrowing costs. Meanwhile, Chinas recovery remained constrained by structural issues in its real estate sector and softening global demand.

Looking ahead, global growth is projected to moderate to 2.8% in 2025, as outlined by the IMF and the World Bank. This reflects a complex interplay of factors, including the withdrawal of pandemic-era stimulus, tighter global financial conditions, and growing geopolitical and trade policy uncertainties. In the United States, growth is expected to slow to 1.8%, as the economy absorbs the impact of reduced fiscal support and restrictive interest rates. The Eurozone is likely to remain in a low-growth environment, hindered by structural rigidity, persistent inflation in services, and subdued credit activity. In China, GDP growth is projected at 4.0%, as the country continues to face a difficult transition from investment-led to consumption-led growth amid property sector fragilities and weakening investor confidence. Despite facing tighter financing conditions and elevated debt burdens, EMDEs are expected to continue driving global growth, with an aggregate expansion of approximately 4.0% in 2025. Economies such as India, Indonesia, and parts of Sub-Saharan Africa are likely to outperform, supported by sustained consumer demand, public infrastructure spending, and digital transformation initiatives.

However, downside risks to the global outlook remain significant. Persistent core inflation, especially in services, could delay monetary easing, with central banks potentially maintaining tight policy stances longer than currently expected. Additional headwinds include geopolitical tensions, potential maritime trade disruptions (such as in the Red Sea), and commodity market volatility stemming from supply shocks. The global financial system also faces vulnerabilities linked to high leverage in specific sectors and geographies, particularly if interest rates stay elevated for an extended period.

In this evolving environment, policymakers in both advanced and emerging economies face the dual challenge of managing disinflation while supporting growth. Central banks, including the U.S. Federal Reserve, the European Central Bank, and several emerging market counterparts have adopted a cautious stance on rate cuts. While headline inflation has broadly moderated, core inflation remains above target in many economies, limiting the room for aggressive monetary easing.

As the global economy transitions through this complex phase, coordinated, data-driven policymaking will be critical. Progress will hinge on governments ability to implement credible fiscal frameworks, strengthen supply-side resilience, and pursue reforms that promote inclusive and sustainable growth in an increasingly multipolar and uncertain global landscape.

Indian Economy

The Indian economy continued to expand at a steady pace in FY 2024-25, despite ongoing global uncertainties and external shocks. According to data from the National Statistical Office (NSO), GDP growth stood at 7.4% in the fourth quarter, improving from 6.2% in the previous quarter, driven by robust private consumption, sustained government capital expenditure, and a healthy recovery in services and industrial activity.

Inflationary pressures eased considerably, with CPI inflation moderating to 3.16% in April 2025, its lowest reading since mid-2019, bringing it well within the Reserve Bank of Indias (RBI) target range. This moderation created headroom for policy stability, allowing the central bank to maintain a balanced monetary stance while continuing to monitor global and domestic price trends.

Key high-frequency indicators remained supportive. GST collections consistently exceeded Rs1.6 lakh crore per month, signalling resilient consumption. Indias current account deficit narrowed to below 1% of GDP, and foreign exchange reserves rose above USD 630 billion, reinforcing external sector stability.

The Union Budget 2025-26 reinforced growth momentum through significant policy measures. A key announcement was the full income tax rebate for individuals earning up to Rs12 lakh, aimed at stimulating household demand. The government also increased capital expenditure by over 11% year-on-year, focusing on transportation, rural infrastructure, green energy, and digital public infrastructure.

The RBIs May 2025 Bulletin and recent policy statements also underscored Indias strengthening position in global trade, supported by shifting global supply chains, rising foreign investment interest, and improved logistics competitiveness.

Looking ahead, the RBI projects GDP growth at 6.7% for FY 2025-26, supported by stable inflation, healthy domestic demand, and the continued rollout of public investment. However, certain downside risks remain, including oil price volatility, capital outflows due to global monetary tightening, and persistent geopolitical tensions. Export growth is expected to stay moderate given the softening of global demand.

Despite these risks, India enters FY 2025-26 with strong macroeconomic fundamentals, a diversified growth engine, and structural drivers in place for sustained medium-term expansion.

INDIAN INSURANCE SECTOR DEVELOPMENTS

General Insurance Industry

Indias non-life insurance industry crossed a significant milestone in FY 2024-25, with gross direct premium income (GDPI) exceeding Rs3 lakh crore for the first time. As per data from the General Insurance Council, total GDPI across all non-life insurers, including general insurers, standalone health insurers, and specialised entities, grew by 6.1% year-on-year, reaching Rs3.07 lakh crore, compared to Rs2.89 lakh crore in FY 2023-24.

While the growth reflects continued expansion, it also marked a moderation from the 12.8% growth recorded in the previous fiscal year, largely influenced by evolving market dynamics and the transition to new accounting standards implemented in October 2024. Among key contributors:

• General insurers accounted for Rs2.58 lakh crore in premiums, up 5.2% year-on-year

• Standalone health insurers maintained strong momentum with a 16% increase, reaching Rs38,413 crore

However, growth was tempered by subdued performance in the crop insurance segment, stagnation in passenger vehicle sales, and heightened pricing pressures in motor and health lines amid rising competition.

According to India Ratings, the industrys gross written premium (GWP) expanded by 8.5% in FY 2024-25, highlighting a period of consolidation within a dynamic regulatory and competitive landscape. Data from the Insurance Regulatory and Development Authority of India (IRDAI) indicates that non-life insurance penetration remained stable at 1.0% of GDP, reflecting the untapped potential for deeper market outreach, particularly in rural and underpenetrated segments. The industry continued to invest in digital infrastructure and product innovation, gradually improving distribution efficiency and policyholder engagement. The growing adoption of online platforms and data-driven underwriting is expected to support long-term cost optimisation and service improvement.

Outlook for FY 2025-26

The outlook for FY 2025-26 remains constructive, with industry forecasts indicating a recovery in growth momentum. Gross written premiums are expected to rise by approximately 13% year-on-year, driven by higher average premiums. strengthened policy renewals, broader product diversification, and increased retention in health and motor segments.

Growth is also expected from the fire and engineering insurance lines, supported by renewal activity, improved risk pricing, and regulatory clarity. Rising disposable incomes, urbanisation, and greater risk awareness are likely to underpin demand across retail and commercial segments. The regulatory landscape continues to evolve positively, with IRDAI advancing initiatives aimed at simplifying operations, enhancing digital access (e.g., through the upcoming Unified Health Interface), promoting product inclusivity, and reducing administrative costs.

Additionally, the recent liberalisation of foreign direct investment (FDI) limits from 74% to 100% is expected to foster greater international participation, facilitating capital infusion, and encouraging the adoption of global best practices across governance, technology, and risk management.

While FY 2024-25 marked a year of moderated growth, the structural fundamentals of Indias general insurance sector remain sound. With supportive regulatory reforms, ongoing digital transformation, and renewed demand drivers, the industry is poised to play an increasingly vital role in advancing financial protection, inclusion, and economic resilience across the country.

Life Insurance Industry

Between FY 2023 and FY 2025, the life insurance industry achieved a compound annual growth rate (CAGR) of 6.8%, driven primarily by private sector insurers, which recorded a robust 12.7% CAGR. In contrast, Life Insurance Corporation of India (LIC) saw a marginal decrease in business.

Indias life insurance sector posted a steady 5.1% year-on-year (YoY) increase in New Business Premiums (NBP) for the fiscal year ending March 2025, reaching Rs3.97 lakh crore·just shy of the Rs4 lakh crore milestone, according to data from CareEdge Ratings. The Annual Premium Equivalent (APE) rose 4.5% YoY in March, reversing a 4.1% decline recorded in the same month a year earlier. The industrys growth was largely propelled by private insurers, while the Life Insurance Corporation of India (LIC) experienced a decrease across key segments.

Individual non-single premium policies decreased by 19.1% YoY to 41.9 lakh in volume terms for FY 2025, reflecting shifts in consumer preferences and structural changes in the product portfolio.

The growth figures were influenced by adjustments to sum assured values and commission structures following the implementation of updated surrender value guidelines on October 1, 2024. These regulatory changes, along with heightened competition, contributed to increased volatility in product performance during the second half of the fiscal year. Group single premium volumes remained largely unchanged.

It is expected that there will be some fluctuations in premium growth in the near term. However, a recovery is expected in FY 2026 as regulatory reforms begin to yield consumer benefits. The proposed Insurance Amendment Act is also poised to support market expansion by attracting new entrants. Private insurers are likely to remain key growth drivers through wider geographic outreach and initiatives such as the Bima Trinity.

Global Reinsurance Outlook 2025-26

Global reinsurers are expected to maintain healthy profitability in 2025, even as risk-adjusted pricing declined across most lines during the January renewal season, Fitch Ratings reported.

The pricing downturn reflects a surplus of capital in the market, suggesting that the reinsurance cycle has moved past its peak. Nevertheless, current market dynamics still support healthy risk-adjusted returns. Fitch projects combined ratios to remain steady at approximately 90% in 2025, while return on equity (ROE) is forecast to ease slightly to 17%, compared to 19% in 2024. As a result, the agency continues to hold a "neutral" sector outlook. S&P Global Ratings has also reaffirmed its stable outlook for the reinsurance industry, highlighting the sectors solid capital base and prudent, defensive strategies. However, the agency cautions that prolonged macroeconomic uncertainty and ongoing trade tensions could weigh on premium growth and pressure investment performance in the longer term.

AM Best has commented that although property reinsurance is beginning to show signs of softening, profit margins remain robust. AM Best attributes this trend to several years of rate hardening, adding that the overall market environment continues to favor reinsurers. Despite more favorable conditions, companies are maintaining disciplined underwriting practices to safeguard profitability and long-term viability. Casualty reinsurance, meanwhile, is under increased scrutiny but continues to be renewed without significant capacity issues. AM Best observes that some insurers are adopting a more cautious stance in light of rising claims severity and persistent litigation risks. Nevertheless, capacity remains steady. Underwriters are also placing greater emphasis on long-tail risks during renewals, ensuring pricing reflects the expected exposure landscape.

BUSINESS OVERVIEW

Introduction

The Corporations gross premium income during the year 2024-25 grew by 10.68% to Rs41,154 Crores with Domestic and International composition largely unchanged. Incurred loss ratio as a % of earned premium is 88.44% compared to 92.27% in the previous year. The income from investments (gross) was Rs12,702.60 Crore. The ratio of total business expenses to the earned premium i.e. Combined Ratio stood at 108.81%. The Solvency Margin of the Corporation as on 31^st March 2025 was 3.70.

Class wise Performance Domestic

Rs Crores

Class of Business	Gross Premium		Incurred Claims Ratio %
	2024-25	2023-24	2024-25	2023-24
Fire	6,811	6,911	85.28	95.45
Motor	5,233	4,466	81.20	87.90
Aviation	88	80	55.53	73.58
Engineering	1,343	1,180	67.35	74.42
W.C.	25	41	83.20	4.07
Liability	541	433	93.62	70.57
PA	530	435	52.05	60.00
Health	9,508	5,622	81.64	86.59
Agriculture	3,188	3,601	90.42	96.44
Other Misc.	902	805	52.96	77.67
FL/Credit	209	126	0.53	13.45
Marine Cargo	377	433	77.34	65.66
Marine Hull	236	200	46.30	51.41
Life	1,671	1,471	148.15	113.01

international

Crores

Class of Business	Gross Premium		Incurred Claims Ratio %
	2024-25	2023-24	2024-25	2023-24
Fire	6,908	5,860	84.86	67.99
Motor	1,123	2,645	119.44	102.16
Aviation	641	784	96.13	96.83
Engineering	423	505	73.77	70.39
W.C.	4	4	2,389.08	-87.75
Liability	233	217	101.61	63.50
PA	44	-2	65.96	98.97
Health	20	107	51.22	195.34
Agriculture	75	84	50.04	42.04
Other Misc.	268	73	106.50	74.48
FL/Credit	91	78	-35.86	29.64
Marine Cargo	135	564	224.14	663.33
Marine Hull	331	311	115.49	142.70
Life	196	148	87.57	137.50

PROPERTY (FiRE & ENGINEERING)

Climate change continues to drive more frequent and severe weather events. In 2024, global natural disasters led to economic losses surpassing USD 300 billion, making it ninth consecutive year to cross this threshold, primarily due to tropical cyclones, severe convective storms, and floods. The insured losses exceeded USD 140 billion dollar, making it the sixth costliest year on record for the industry.

In response to evolving catastrophe risks, demand for reinsurance has remained elevated. The market has largely stabilised in 2024, with capacity returning with strength amid stronger market confidence. The reinsurers, with their increased risk appetite, were willing to deploy capacity through large line sizes and expanded coverage. Despite the abundance of capacity, the underwriting discipline remained at the core of decision-making for the reinsurers. Underwriting has become more selective and tailored with focus on portfolio resilience.

Secondary perils have contributed significantly to this heightened scrutiny. Once considered as peripheral, these perils have now moved to the mainstream of reinsurance risk consideration, reshaping the underwriting decisions and capital deployment strategies. Reinsurers are increasingly unwilling to allocate capacity to the lower layers of catastrophe treaties, where secondary perils such as hail and wildfire tend to concentrate. More broadly, the market is shifting towards prioritising portfolio quality, strategic flexibility, and sustainable growth.

Domestic

In FY 2024-25, the Domestic Fire Insurance market contracted by 5.34%, with gross premiums declining from 25,656.35 crore to 24,286.36 crore, reversing the 7.22% growth seen in the previous fiscal. This decline was primarily driven by a soft market cycle and heightened competition in the direct insurance space.

GIC Res Domestic Fire Gross Premium also saw a marginal decrease of 1.4%, falling from 6,911.25 crore to 6,811.28 crore, with Obligatory cessions contributing 13.38% to the segments total income.

Despite the topline contraction, the market benefited from fewer natural catastrophe events resulting in improved loss experience. GIC Res underwriting performance showed a notable improvement, with the loss ratio improving from 95.5% to 85.3%. Though the combined ratio improved from 112.3% to 110.8%, the extent of improvement will not be in line with the improvement in loss ratio due to the increased commission outgo driven by lower loss ratios, intensified competition and the growing presence of Foreign Reinsurance Branches (FRBs) and Cross-Border Reinsurers (CBRs) in the Indian market.

There are signs of pricing improvement noted industry wide from January 1,2025, which indicates a positive outlook. Consequently, gross premiums for Fire segment is projected to grow in FY 2025-26 returning to its historical growth trend.

Foreign

GIC Res international property business (including the branches) reported a gross premium growth of approximately 15.18% for FY 2024-25 reflecting our continued engagement with key markets and strategic underwriting. However, the incurred claims ratio rose from 68.2% to 84.1%, primarily driven by major Cat events, including the Taiwan Earthquake, California wildfires, and the Dubai floods.

These developments are attributed to the growing volatility in global catastrophe activity. As climate change continues to influence the frequency and severity of both primary and secondary perils, GIC Re remains committed to reinforcing a dynamic and adaptive approach and evolving its strategies in line with emerging global risk trends.

MOTOR

Domestic

Indias strong domestic market, fuelled by rising vehicle ownership, continues to demonstrate resilience. The countrys motor insurance landscape is undergoing significant transformation, driven by regulatory changes, the integration of digital technologies, and the gradual adoption of telematics-based insurance policies. These factors are reshaping the market dynamics.

In the financial year 2024-25, GIC Res domestic gross premium increased from Rs4,466.27 crore in the previous year to Rs5,232.62 crore, registering a growth of 17.16%. Notably, the combined ratio improved from 104.32% to 96.78%, indicating better underwriting performance.

In FY 2024-25, obligatory premium accounted for 76% of the gross domestic premium, while the remaining 24% came from non-obligatory business. There was a 6% increase in the obligatory gross premium for the year ended March 31,2025, compared to the corresponding period of the previous year. During the same period, direct motor insurance premium grew by 7.94%.

Foreign

Globally, the motor insurance market has experienced strong growth. It is expected to expand from $877.75 billion in 2024 to $960.69 billion in 2025, at a compound annual growth rate (CAGR) of 9.4%.

However, GIC Res international motor business recorded a sharp decline in premiums. The gross premium fell by 57.54% year-on- year, from Rs2,644.66 crore in FY 2023-24 to Rs1,122.95 crore in FY 2024-25, primarily due to certain territories or treaties entering a run-off phase, with no further premium booking expected from those regions. The combined ratio slightly deteriorated, increasing from 130.77% to 133.90% during the same period.

Overall Motor

For the motor portfolio as a whole, GIC Res gross premium declined by 10.62% year-on-year, from Rs7,110.93 crore in FY 2023- 24 to Rs6,355.57 crore in FY 2024-25. However, the combined ratio improved, from 113.48% to 108.89%, reflecting better overall underwriting efficiency.

Going forward, the focus will be on revamping and expanding the international portfolio by exploring new opportunities, while strengthening GIC Res position in the domestic market.

LIABILITY

The global liability insurance market size, which was valued at $290.46 billion in 2024, is projected to reach $428.33 billion by 2030, growing at a CAGR of 6.75%. Increased awareness of liability risks, regulatory changes mandating insurance coverage, and evolving court judgments increasing liability exposures have resulted in a significant uptick in the demand for reinsurance capacity to cover extensive and intricate liability risks across sectors like IT, healthcare, construction, and professional services. The Corporation continues to play a crucial role by offering reinsurance support to both domestic and international insurers, facilitating the expansion of their liability insurance portfolios while effectively managing own exposure to on large-scale losses. As on 31^st March 2025, the Corporation achieved a GWP of INR 773 crores for Liability class with split as 70% from domestic market

(Rs540 crores) and 30% from foreign markets (Rs233 crores). The overall GWP increased by 19% from previous year mainly due to us regaining leadership in several domestic treaties. Concurrently, the combined ratio increased from 84.6% as on 31^st March 2024 to 116.7% as on 31^st March 2025. The Corporation recognizes immense potential in Cyber Insurance. We will continue to adhere to our careful approach when offering cyber capacity. We plan to focus on collating more cyber data and enhance our analysis towards effectively managing exposures in this evolving sector. Going forward, the Corporation is poised to leverage expertise in underwriting and risk management to capitalize on emerging opportunities while navigating challenges and the impact of global trends on liability exposures.

MISCELLANEOUS & PERSONAL ACCIDENT

As on 31^st March 2025, the Corporation generated Rs1744 crores in Gross Written Premium (GWP) for Miscellaneous and Personal Accident (PA) Insurance, primarily sourced from the domestic market (82%, Rs1432 crores) with a decent contribution from foreign markets (18%, Rs312 crores). The overall GWP increased by 33%, driven by growth in domestic premiums. The combined ratio showed improvement from 89.79% as on 31^st March 2024 to 68.08% as on 31^st March 2025. The Corporations strategic focus on innovative products like parametric income protection and identity theft insurance demonstrates adaptability to the dynamic insurance landscape. The Corporation aims to provide continued support to both domestic and foreign insurers, facilitating growth in their Miscellaneous and PA insurance portfolios while maintaining profitability in its own operation

CREDIT RE

Valued at Rs2,135 Crore in domestic premiums for FY 2024-25, Indias credit insurance market is currently dominated by a single player, ECGC, with 64% market share. However, the landscape is evolving. Other general insurance companies are leveraging their growth aspirations and expertise to tap into this growing market. Additionally, the introduction of Surety Bonds in 2022 has spurred the insurance companies to offer customized products such as bid bond, performance bonds etc. This is leading to a shift away from traditional bank guarantees and towards bond issuance. The Corporation remains a key player, providing crucial reinsurance capacity in this dynamic market. As on 31^st March 2025, Credit Re GWP is Rs300 Crores, with 70% premium generated from domestic market (Rs209 crores) and 30% from foreign market (Rs91 crores). The combined ratio saw an improvement, dropping from 50.5% as on 31^st March 2024 to 8.9% as on 31^st March 2025. Despite growth opportunities in developing economies, rising interest rates and potential slowdowns might increase credit risk. We plan to navigate this segment in domestic and international markets with prudent exposure management.

HEALTH

Indias health insurance sector is expanding rapidly, fuelled by growing public awareness. The health market offers a variety of plans, including individual, family, and specialized policies for critical illnesses and senior citizens. Government schemes like Ayushman Bharat have significantly increased coverage. Although the sector faces challenges like low penetration and regulatory complexities, it shows strong growth potential. The advent of digital technologies and innovative services, such as telemedicine and wellness programs, is transforming the industry, enhancing accessibility and customer focus.

Industry premium has grown by 6.21% vis-a-vis the health market has emerged as one of the most rapidly expanding segments in the insurance industry over the past few years, with an impressive annual growth rate of 8.98% as on 31.03.2025. (source: GI Council). This growth becomes more significant since IRDAI recently revised formats for long term policies.

The health insurance sector is poised for substantial growth and competitive dynamics which underscores the sectors economic potential. Nevertheless, the paramount importance of health insurance extends beyond mere statistics, as it upholds profound social significance for all stakeholders involved, ensuring access to essential healthcare services.

The Corporations health portfolio is diversified across several key areas:

• Obligatory cessions: These mandatory reinsurance contracts require primary insurers to cede 4% of their health business to the Corporation, making up a 49% of our portfolio.

• Domestic treaty business: This includes reinsurance agreements with domestic insurers, both proportional (sharing premiums and risks) and non-proportional (covering specific losses).

• Facultative business: This involves reinsurance on an individual risk basis, providing greater flexibility in underwriting and pricing.

• Government Mass Schemes: The Corporation also participates in large-scale government health insurance programs.

With a clear strategic focus on expanding its health insurance portfolio, the Corporation has adopted a prudent and methodical underwriting approach. This approach emphasizes sustainable growth, robust risk management, and diversification across product lines. In FY 2024-25, health insurance accounted for 23.15% of the total gross premium, reflecting the Corporations strong performance·particularly in the proportional and facultative reinsurance segments.

Through targeted initiatives and disciplined underwriting practices, the Corporation successfully reduced obligatory cessions from 72% of health reinsurance premiums in FY 2023-24 to 49% in FY 2024-25, despite a stable cession rate of 4%. This shift underscores the Corporations strategic emphasis on strengthening premium growth within the health line of business.

We are dedicated to fostering growth in the Indian health insurance market, with a strong focus on profitability. Our strategy includes improving product quality, carefully evaluating risks, streamlining underwriting processes, and managing claims effectively, all while adapting to regulatory changes and ensuring full compliance.

AGRICULTURE REINSURANCE

In India, Pradhan Mantri Fasal Bima Yojana (PMFBY) was introduced in Kharif 2016, administered by the Ministry of Agriculture and Farmers Welfare. It replaced the National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS).

PMFBY provides a comprehensive insurance cover against failure of the crop thus helping in stabilising the income of the farmers and encourage them for adoption of innovative and modern agriculture practices. It covers various stages of crop production from Sowing to Harvesting.

For 2024-25, various states have implemented surplus sharing models (SSM) like 80:110 and 60:130 with idea of capping the loss ratios.

SSM (80:110) - Liability of the insurer is limited to the loss ratio range 80%-110%. That is, the insurer will return to the state all premiums associated with any profits realized on loss ratios below 80%. On the loss side, the State government will bear all losses for loss ratios above 110%.

SSM (60:130) - Liability of the insurer is limited to the loss ratio range 60%-130%. That is, the insurer will return to the state all premiums associated with any profits realized on loss ratios below 60%. On the loss side, the State & Central Government will bear all losses for loss ratios above 130% equally

The contribution of SSM models in the total agriculture insurance premium in the country is currently estimated at 65% to 70% of total market premium.

Govt. of India has taken several new technological initiatives under the PMFBY and RWBCIS to empower farmers, streamlining the operations in crop insurance and promote transparency in loss assessment, such as YES-TECH, WINDS and CROPIC.

YES-TECH: Yield Estimation System based on Technology (YES-TECH) advocates the blended use of modelled and Crop Cutting Experiments yield-estimates for insurance claim assessment.

WINDS: Weather information and Network Data System (WINDS) is a programmatic initiative to strengthen weather data infrastructure in the country and to provide good quality weather datasets from a single digital platform.

CROPIC: Collection of Real Time Observations & Photographs of Crops (CROPIC) is a Smart phone-based crop data repository and pictorial analytics to detect crop losses.

GIC Re continues to support the crop insurance scheme in India, i.e. Revamped Pradhan Mantri Fasal Bima Yojana scheme (Revamped PMFBY, w.e.f., Kharif 2020 season) & Revised Weather Based Crop Insurance Scheme (RWBCIS) from 2016; by way of extending reinsurance support on quota share treaty and stop loss treaty arrangements of the Indian Insurance companies.

The gross premium under Agriculture portfolio reduced to Rs3263.05 Crore in FY 2024-25 from Rs3,685.36 Crore in FY 2023-24. The split of GIC Res Agriculture portfolio between Indian and International business is 97.70% and 2.30% respectively.

The Indian agriculture market premium for year 2023-24 and 2024-25 is around Rs31,400 Crore. Out of which the corporations Indian gross agriculture premium has reduced to Rs3188.04 Crore in FY 2024-25 from Rs3601.11 Crore in FY 2023-24, a degrowth of 11.47%. The contribution of obligatory premium is approx. 36% of gross Indian agriculture premium. The degrowth in the domestic portfolio is due to increased contribution of SSM models in the market resulting in increased retentions of the domestic insurance companies. The loss ratio in respect of the Indian business has improved to 90.42% in FY 2024-25 from 96.44% in FY 2023-24.

GIC Res International gross agriculture premium has decreased to Rs75.01 Crore in FY 2024-25 from Rs84.25 Crore in FY 2023-24, a degrowth of 10.96%. Also, the loss ratio for International agricultural book has deteriorated to 50.04% in FY 2024-25 from 42.04% in FY 2023-24.

Looking ahead to FY 2025-26, most states are expected to continue under existing multi-year agreements. However, states like Maharashtra and Odisha are anticipated to float re-tenders, which may present new opportunities for reinsurance participation.

MARINE CLASS (CARGO, HULL AND OIL & ENERGY)

MARINE CARGO Domestic

The domestic cargo market continues to exhibit a steady demand for coverage, particularly for high-risk segments like inflammable substances, automobile sectors for complete built units and pharmaceutical products. Requests for the coverage of Stock throughput policies in market are going up. The market pricing is anticipated to remain soft in the upcoming financial year due to recent pricing corrections and challenging geopolitical factors. Even, the facultative market remains soft. Hence, to retain leadership we have adopted the current market trends and price. However, to mitigate risks, we will continue to uphold underwriting discipline by enforcing minimum rates and deductibles.

In the Persian Gulf region, there are very few losses in past 3 years, therefore London market is providing leverage in the rates charged which was more than other parts of the world. So, following the current market scenario we are reviewing the HRA rates which may further reduce.

There has been an increase of 6.9% in marine cargo gross premium for Indian market to 3939.96 crores in FY 2024-25 as compared to previous year gross premium of 3686.24 Crores. The corporations domestic marine cargo gross premium decreased by 12.98% to 376.96 crores as compared to gross domestic marine premium of 433.18 Crores in 2023-24.

The corporations primary focus is on non-proportional treaties and within the segment, it has been providing coverage for diverse cargo types excluding perishable items, aquamarine products and frozen foods Additionally, the emphasis has been on appropriate clauses, conditions and warranties to meet client needs while advancing our underwriting approach. Ongoing treaty reviews ensure necessary improvements in underwriting performance.

International

The global cargo insurance landscape is undergoing significant changes due to a confluence of factors. Economic slowdown, central bank policies, geopolitical tensions, and supply chain disruptions are creating a complex environment.

Global economic deceleration and central banks anti-inflation measures may reduce trade volumes, impacting cargo insurance. Geopolitical instability, particularly in Russia - Ukraine and Israel - Palestine, along with Red sea crisis is further exacerbating these challenges. The industry is grappling with rate reduction, risk accumulation, and coverage with discounted rate for STP and STOP policy. Consequently, the marine reinsurance market is witnessing rate decrease.

Marine Cargo Foreign book decreased to 134.50 Crores reflecting 76.16% decrease from the previous year 2023-24 of 564.15 Crores. However, this is primarily attributable to claims related to the terminated US binder agreement, rather than organic portfolio deterioration.

The year 2024-25 was relatively free from major losses for this class of business with very few losses in cargo like MV Frankfurt.

MARINE HULL (INCLUDING OIL & ENERGY)

Domestic

The corporation maintains a strong focus on the facultative segment of the domestic marine hull market, which remains predominantly driven by facultative reinsurance. We actively participate in domestic facultative policies, subject to adequate pricing. Domestic hull insurance rates have soften compared to the previous year due to availability of reinsurance capacity. The Gross marine hull premium for Indian market grew by 13.5% to 1595.33 crore in FY 2024-25 over expiring year of gross premium of 1405.25 in 2023-24, while corporations domestic hull book saw a surge of 17.92% to 236.27 Crores from expiry gross premium of Rs200.36 crores in 2023-24. The corporation continued to refrain from participating in the risks that had inadequate pricing. Aligned with the governments initiative to boost ports and shipbuilding, the corporation is committed to supporting upcoming projects. There has been increase in demand for RI capacity for Ship Builders Risks. The combined ratio for the domestic hull portfolio has performed better from 63.04% in 2023-24 to 57.48% in 2024-25.

International

The international hull market is facing unprecedented challenges. Geopolitical tensions, supply chain disruptions, inflation, and evolving risk profiles, are driving market volatility.

The war in Ukraine, the Red Sea crisis, and material shortages, primarily steel, have significantly impacted the industry. Rising inflation has increased costs across the value chain, eroding insurers profitability. The frequency of fires on container ships and car carriers, exacerbated by the transportation of lithium-ion batteries and electric vehicles, poses new challenges. There are no large losses this year.

The corporation has adopted a calibrated approach, withdrawing from upstream energy policies with inadequate pricing and low deductibles. The corporation is exploring opportunities in upstream energy construction and P&I insurance with higher attachment points. While the hull insurance market is undergoing rate adjustments, the impact on P&I insurance is yet to be fully realized.

The corporations marine hull foreign book increased by 6.71% to 331.55 crores in FY 2024-25 from expiry 310.71 Crores in 2023-24.

The international hull portfolio recorded an adverse combined ratio of 133.78%, primarily attributed to oil rig explosion in Gulf of Mexico.

AVIATION

The worldwide aviation insurance sector has been experiencing robust growth in recent years, driven by an increase in air passenger traffic, the emergence of low-cost carriers, greater aircraft complexity, elevated security risks, and concerns related to ESG (Environment, Social & Governance).

A soft market cycle continues in the airline policies but with healthy levels of insurance capacity available, the market can absorb the increased exposures, rate reductions and market players are holding on to their market shares. Market claims activity relating to recent major losses, coupled with ongoing attritional claims and geopolitical risks, mean that negotiations are likely to be more robust in 2025 than in 2024.

Aviation remains one of the safest forms of transportation. According to the IATA 2024 Safety report, the "all accident rate" stands at 1.13 per million flights (equating to one accident for every 880,000 flights), which is an improvement over the five-year average of 1.25 per million flights. This rate is only slightly higher than the record low of 1.03 noted in 2023, the lowest in the past decade. Despite some recent high-profile aviation incidents, it is crucial to keep in mind that such accidents are exceedingly rare. In 2024, there were 40.6 million flights and only seven fatal accidents. Furthermore, the overarching narrative of aviation safety is one of ongoing improvement.

Some major market losses in Jeju Air, Azerbaijan Airlines, Air Busan & American Airlines (in Q3 & Q4 of FY 2024-25) is expected to drive hardening in the premium rates. GIC Re however did not participate in majority of these airlines.

The Aviation Excess of loss (XOL) treaty market continues to be in the hard market cycle which was seen in previous underwriting years due to deterioration of Boeing loss in the XOL market and high uncertainty with the regards to losses reserved for Russia- Ukraine War which is expected to reach a resolution in Q2 of FY 2025-26.

GIC Res gross premium income has decreased by 15.66% to Rs729.08 Crore in the FY 2024-25 as against Rs864.45 Crore in the previous FY 2023-24. The incurred claims as % to earned premium has reduced to 87.40% for FY 2024-25 vis-a-vis 92.44% for FY 2023-24. This can be mainly attributed to continuous review of accounts with high attritional claims at portfolio level, reduced claims activity at market level.

The gross premium split comprises 87.87% from international business and 12.12% from domestic business for FY 2024-25 as against 90.70% from international business and 9.30% from domestic business for previous FY 2024-25. The portfolio continues to be primarily focused on international business, but efforts are made to maintain domestic account signings and increasing them wherever possible to bring balance to the overall portfolio.

REINSURANCE POOLS IN INDIA

The practice of establishment of reinsurance pools to cater to situations where supply of insurance is a constraint is well accepted globally. Time and again, the Indian Market has also adopted the practice to overcome capacity challenges imposed by insufficient availability or withdrawal of international reinsurance support. GIC Re, as the Indian Reinsurer has played a pivotal role in creation and successful operation of pools for over two decades. GIC Re has been managing Pools in India and provides its support with very significant capacity as a pool member and as its reinsurer.

THE INDIAN MARKET TERRORISM RISK INSURANCE POOL

The Indian Market Terrorism Risk Insurance Pool (IMTRIP) was established in the aftermath of the 9/11 incident in the United States which led to worldwide withdrawal of treaty capacity for Terrorism Insurance. The Pool was formed in April 2002 to create domestic capacity within India to underwrite terrorism risk. The Pool has now completed 23 years of successful operations. Twenty-four non-life insurance companies (other than monoline insurers) and GIC Re are members of the Pool.

The Pool is applicable to insurance of terrorism risk covered under property insurance policies. There was no change in the capacity offered by the Pool from previous year which is Rs2,000 Crore per location. Premium rates also remained unchanged from previous year.

The Pool continues to experience decline in premium cessions on account of launch of alternate products by insurance companies wherein Terrorism is an optional cover. (Earlier, terrorism coverage was a compulsory coverage under standard Fire and allied perils products.) Reduction in inward premium was also observed during H2 2024-25 on account of change in premium accounting methodology for Long-Term Policies as per IRDAI Master Circular on Actuarial, Finance and Investment Functions of Insurers dated 17.05.2024.

The Pools assets stand at Rs18,172 Crore as at 31.03.2025 (Rs15,799 Crore as on 31.03.2024). GIC Re as Pool Manager gets 1% (of original gross premium) Management Commission. Apart from its role as Pool Manager, GIC Re also contributes capacity to the Pool as a member of the Pool to the tune of 16.68% and participates as a reinsurer on the Pools excess of loss reinsurance protection.

5 years pool premium and claims ratio are as per bar chart below.

INDIA NUCLEAR INSURANCE POOL (INIP)

INIP was formed as an initiative by the Corporation along with 11 domestic non-life Insurance companies to provide insurance cover to nuclear operators against their statutory liability under the Civil Liability for Nuclear Damage Act, 2010, resulting from a nuclear incident, and liabilities of Suppliers to the Operator arising out of invocation of right to recourse under the Act.

The Pool provides annual indemnity limit of Rs1500 Crore on any one accident and in the aggregate.

The pool capacity and rates have remained constant for last one year. No claims have been reported under INIP since its inception. The Pools assets stand at Rs1255 Crore as on 31.03.2025. (Rs1055 Crore as on 31.03.2024).

GIC Re as a member has 40% share in the pool. GIC Re as Pool Manager gets Management Commission of 1% (of original gross premium).

MARINE CARGO EXCLUDED TERRITORIES POOL (MCET POOL)

Due to the withdrawal of international marine cargo insurance capacity for covering imports and exports to/from Russia, Ukraine, and Belarus, there arose a need to create a domestic Marine Cargo Pool to insure shipments related to these Excluded Territories. This withdrawal of capacity stemmed from increased geopolitical risks, sanctions, and instability in these areas, making it difficult for Indian businesses to obtain necessary insurance coverage. Consequently, the Marine Cargo Pool for Excluded Territories (MCET Pool) was formed and commenced operations on 1^st June 2022.

Currently, the MCET Pool provides insurance to Indian insureds for marine cargo shipments of approved commodities to and from the excluded territories of Russia, Ukraine, and Belarus.

The Pool was initially formed with a total of 21 members, contributing a capacity of Rs484.80 crores per shipment (net of obligatory cession limits). This was later revised to Rs478.80 crores per shipment following the exit of one Pool member. The Pools capacity remains unchanged for the year 2024-25.

GIC Re, as the Pool Manager, along with the Pools Underwriting Committee (UC), approves the inclusion of new commodities under the Pool as needed. Currently covered commodities include fertilizers, pet coke, coal, crude oil and its derivatives, project cargo, steel, etc. Whenever a new commodity is proposed by any Pool member, the UC·including GIC Re·reviews and determines the applicable rates and terms.

The Pool covers import shipments of all approved commodities. GIC Re holds the largest capacity share at 51.56%. As the Pool Manager, GIC Re receives a 2.5% management commission on the original gross premium (net of obligatory cession).

The accounted premium of the Pool since inception is as below:

LIFE RE

Life reinsurance plays a critical role in stabilizing the risk portfolios of life insurers and enabling product innovation and expansion. In India, the life reinsurance landscape has seen increasing competition and diversification, with global reinsurers such as Swiss Re, Munich Re, Hannover Re, SCOR, and RGA actively participating through their branch offices.

GIC Re leveraging deep local market understanding and robust client relationships. The Corporation is uniquely positioned as the only Indian reinsurer with a strong presence across all life reinsurance segments in the country.

GIC Re held an 18% share of the Indian life reinsurance market (Source: IRDAI Annual Report for FY 2023-24) reaffirming its strategic role in the industry. The Corporation currently extends reinsurance support to 24 Indian life insurance companies through both Treaty and Facultative arrangements.

In alignment with the Government of Indias financial inclusion agenda, GIC Re remains a committed partner in flagship schemes such as Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Microfinance-linked credit life products, and the IRDAI-mandated Saral Jeevan Bima.

The Corporation recorded a notable increase in gross life reinsurance premium, rising from Rs1,618 Crore in FY 2023-24 to Rs1,867 Crore in FY 2024-25, reflecting a year-on-year growth of 15%. This 15% growth in gross life reinsurance premium from FY 2023-24 to FY 2024-25 reflects the Corporations enhanced risk assessment and underwriting precision, driven by detailed analysis of claim frequency and severity. Strategic adjustments in product design, pricing, have further contributed to this upward trajectory of new GTL business specifically. These improvements position the Corporation for continued market share expansion and portfolio sustainability.

GIC Res life reinsurance portfolio is well-diversified and strategically aligned with the needs of both retail and group segments. The primary business segments are as follows:

• Group Credit Life - Microfinance Institutions (28%) Insurance linked to microloans serving economically vulnerable populations. These are typically structured under quota share reinsurance arrangements, supporting inclusive growth through protection of small-scale credit.

• Group Credit Life - Non-Microfinance (16%) Products designed to mitigate credit risk for institutional lenders by covering outstanding loan liabilities in the event of the borrowers death. These support portfolio protection in structured finance sectors.

• Individual Term and Savings Plans (31%) Tailored products offering long-term financial protection and savings benefits. During the current financial year, GIC Re has made significant progress by entering long-term quota share treaties, reflecting product and process maturity.

• Group Term Life (21%) Short-term life covers, usually up to 12 months, for employer-employee and affinity groups. The Corporation has enhanced its offering by including Terminal Illness (TI) riders and increasing Free Cover Limits (FCL) on a case- by-case basis.

• Health Products (3%) Fixed-benefit health insurance offerings that provide a lump-sum payment upon hospitalization, independent of actual medical costs incurred.

• As per the Corporations Balance Sheet for FY 2024-25, the portfolio is divided between domestic (88%) and international (12%) business, reflecting GIC Res focused approach to domestic development while selectively expanding its international footprint.

GIC Re, with a 18% market share in life reinsurance, is poised to lead this growth, building on its strong domestic foundation and exploring selective international opportunities and continues to demonstrate strong leadership in Indias life reinsurance market, marked by premium growth, product innovation, and alignment with national objectives. With a focus on efficiency, client- centricity, and responsible underwriting, the Corporation is well-positioned to capitalize on emerging opportunities and steer the industry forward in the years to come.

FUTURE OUTLOOK

The future outlook for the reinsurance industry in 2025 is cautiously optimistic, with strong fundamentals supporting profitability but several headwinds creating uncertainty. These include climate change, risks of natural disasters and new regulations in the offing. Competition amongst insurers is expected to result in soft pricing and moderation in profitability. Underwriting is expected to be disciplined and overall, the market is expected to be favourable for reinsurers.

In accordance with Para 12 of Part II of Schedule II of the Insurance Regulatory and Development Authority of India (Actuarial,

Finance and Investment Functions of Insurers) Regulations, 2024, the management of the Corporation hereby:

1. Confirms that the Registration No. 112 granted by the Authority continues to be valid.

2. Certifies that all the dues payable to the statutory authorities have been duly paid.

3. Confirms that the shareholding pattern as well as transfer of shares during the year is in accordance with the statutory or regulatory requirements.

4. Declares that the funds of the holders of policies in India are not directly or indirectly invested outside India.

5. Confirms that the required solvency margins have been maintained.

6. Certify that the values of all the assets have been reviewed on the date of the Balance Sheet and that in his (insurers) belief the assets set forth in the Balance-sheets are shown in the aggregate at amounts not exceeding their realisable or market value under the several headings - "Loans", "Investments", "Agents balances", "Outstanding Premiums", "Interest, Dividends and Rents outstanding", "Interest, Dividends and Rents accruing but not due", "Amounts due from other persons or Bodies carrying on insurance business", " Sundry Debtors", "Bills Receivable", "Cash" and the several items specified under "Other Accounts";

7. Confirms that the Corporations risk exposure consists of (a) Obligatory and Additional Quota Share Cessions (b) Facultative acceptances (c) The Corporations share in Indian Insurance Companies through Surplus Treaties and Excess of Loss programme (d) The Corporations share in Market Surplus Treaties and (e) Foreign Inward business Treaty and Fac. The exposures are adequately protected by the Corporations Reinsurance Programme for 2024-25 that aligns with the Retention Policy.

8. (a) The Corporations overall top ten exposures in other countries, are as follows:

United Kingdom, Malaysia, Israel, China, Sweden, Hong Kong, Germany, Turkey, United Arab Emirates and South Africa. Based on experience, internal evaluation of changes in portfolio exposures and analysis of catastrophe modelling software output, the Corporation constantly reviews and refines its retrocession programme for various classes of business.

The Corporation has a Board approved Reinsurance Protection Programme in place.

(b) Certifies that the Corporation does not underwrite direct business in any country. However, its branch in GIFT City (Special Economic Zone, Gujarat) can transact direct insurance business, in addition to Reinsurance business, within the SEZ including IFSC, except those which are specifically excluded. The Corporation has foreign branch offices at Kuala Lumpur, Dubai (Branch put into run-off) and London.

9. The portion of the claims recoverable under the reinsurance obligation of the Corporation are settled with the reinsured as per agreed arrangements, i.e. through cash calls and periodical account statements. Additionally, claims in respect of run-off aviation policies issued prior to being designated as an Indian reinsurer are settled to the insured. The position of Ageing of outstanding facultative claims under the categories of Indian, Foreign Inward and Aviation Business as on 31^st March 2025 is as under:

Ageing of Facultative Claims as on 31.03.2025

(Amount ^ in lakhs)

SI No.	Outstanding Period	FIRE		MARINE		ENGINEERING		AVIATION		LIABILITY		MISCELLANEOUS		TOTAL
		No. of claims	Amount	No. of claims	Amount	No. of claims	Amount	No. of claims	Amount	No. of claims	Amount	No. of claims	Amount	No. of claims	Amount
1	30 days	5	615	2	9	3	30	16	435	-	-	-	-	26	1,089
2	>30 days upto six(6) months	32	4,573	12	699	9	406	69	1,970	-	-	-	-	122	7,648
3	>6 months upto 1 year	64	8,780	12	18,243	13	1,474	57	2,045	5	101	-	-	151	30,643
4	1 year upto 5 years	467	66,417	148	37,902	115	22,616	590	18,608	54	456	18	131	1,392	1,46,132
5	>5 years	532	19,742	131	5,039	218	10,064	1,098	26,905	55	1,765	94	1,036	2,128	64,552
	TOTAL	1,100	1,00,127	305	61,892	358	34,591	1,830	49,964	114	2,322	112	1,168	3,819	2,50,064

GIC Re being a reinsurer, the Average Claim settlement is not applicable since the claims are settled through periodic statement of accounts and cash calls after reconciliation of overall business transactions throughout the year.

10. This is to certify that the values as shown in the balance sheet of the investments and stocks and shares have been arrived at as stated in Significant Accounting Policies No. 9.

11. Declares that the review of asset quality and performance is as mentioned below for Loans and Investments:

INVESTMENTS

The book value of the investment as on 31^st March 2025 has increased to Rs1,06,733.46 Crore from Rs96,299.27 Crore. The realizable value of investments is at Rs1,46,851.26 Crore as on 31^st March 2025 showing an appreciation of 37.59% over book cost. Income from investment including Profit on Sale amounted to Rs11,204.33 Crore as against Rs10,564.42 Crore in the previous year. Out of the total investment of Rs1,06,733.46 Crore, Rs56,030.50 Crore are invested in Government Securities and State guaranteed Bonds. Book Value of equity shares is at Rs17,412.21 Crore and market value stood at Rs57,424.63 Crore showing net fair value appreciation of Rs40,012.42 Crore.

Out of the Investment, loan as on 31^st March 2025 stood at Rs128.59 Crore compared to Rs146.12 Crore in the previous year. Out of the total loan amount of Rs128.59 Crore, Rs122.95 Crore are either secured or guaranteed by the Government bodies representing 95.61% of total loans and the balance Rs5.64 Crore are unsecured. Interest income from loans amounted to Rs8.50 Crore. Standard performing assets (Loan) account for Rs84.23 Crore and an amount Rs44.36 Crore has been provided for the non-performing assets (Loan).

Gross NPA as on 31^st March 2025 amounted to Rs895.05 Crore. Gross Loan Assets amounted to Rs78,919.05 Crore and Net Loan Assets Rs78,024.00 Crore. Percentage of Gross NPA to Gross Loan Assets was 1.13% and percentage of Net NPA to Gross as well as Net Loan Assets was NIL.

The Corporation has complied with the regulation of investments prescribed by IRDAI for investment limits in housing and infrastructure and social sector. The compliance has been made on aggregate basis.

12. Confirms that:

i. In the preparation of financial statements, the applicable accounting standards, principles and policies have been followed along with proper explanations relating to material departures.

ii. The management has adopted accounting policies and applied them consistently (including those specifically required by various IRDAI regulations) and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Corporation at the end of the financial year and of the operating profit and net profit of the Corporation for the year.

iii. The management has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the applicable provisions of the Insurance Act, 1938, Insurance Law (Amendment) Act, 2015 (to the extent notified), Companies Act, 2013, for safeguarding the assets of the Corporation and for preventing and detecting fraud and other irregularities.

iv. The financial statements are prepared on a going concern basis.

v. The management has ensured that an internal audit system commensurate with the size and nature of the business exists and is operating effectively.

13. Certifies that except for salary and remuneration paid to relatives of Directors who are employees of the Corporation as per the terms of employment, no payment has been made to individuals, firms, companies and organisations in which the Directors of the Corporation are interested.

14. Confirm that compliance with domestic, statutory, regulatory and other laws in the countries in relation to subsidiaries, associates, joint ventures and other arrangements have been made.

	For and on behalf of the Board of Directors
	Sd/-
	(Ramaswamy Narayanan)
Date: 26.05.2025	Chairman and Managing Director