Generalinsuranceofindia Ltd — Q3 FY26

General Insurance Corporation of India Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=EVTIHCtKEeE Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to the General Insurance Corporation of India Q3 FY26 earnings 0:08 8 seconds conference call. As a reminder, all participant lines will be in the listenon only mode and there will be an opportunity for you to ask questions 0:17 17 seconds after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on 0:26 26 seconds your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Miss Nikita 0:35 35 seconds from EY. Thank you and over to you ma'am. 0:38 38 seconds Thank you Mark. Uh good morning all the participants in the call and thanks for joining Q3 FI26 earnings call for General Insurance Corporation of India. 0:48 48 seconds Please note that we have mailed out the press release and presentation to everyone and you can now see the results on our website and it has been uploaded 0:56 56 seconds on the stock exchange as well. In case you have not received the same, you can write to us and we'll be happy to send it over. Before we proceed with the 1:04 1 minute, 4 seconds call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertaintities, and 1:11 1 minute, 11 seconds other factors. It must be viewed in conjunction with our businesses that could cause future results, performance, or achievement to differ significantly 1:20 1 minute, 20 seconds from what is expressed or implied by such forward-looking statements. to take us through the results for the quarter and answer our questions. We have with 1:27 1 minute, 27 seconds us Mr. Hitesh Jooshi, executive director, additional charge of CMD and other top members of the management and GIC. We will be starting the call with a 1:36 1 minute, 36 seconds brief overview of the quarter gone by which will then be followed by this Q&A session. With that said, I'll now hand over the call to Mr. Jooshi. Over to you, sir. 1:49 1 minute, 49 seconds Good morning ladies and gentlemen and thank you for joining us for JA series earnings call for the third quarter of FY26. 1:57 1 minute, 57 seconds The global insurance market is moving into a more balanced phase following a period of structured hardening. While rate momentum has moderated across 2:06 2 minutes, 6 seconds certain lines, underlying risk conditions remain elevated driven by climate related volatility. Inflation in 2:13 2 minutes, 13 seconds loss costs, geopolitical developments and higher cost of capital. Accordingly, capital across the industry is being 2:20 2 minutes, 20 seconds deployed with greater sensitivity, selectivity, and technical rigor. 2:25 2 minutes, 25 seconds Investment yields continue to support overall earnings even as underwriting margins gradually normalize. In parallel, reinsurers are reassessing 2:33 2 minutes, 33 seconds legacy assumptions across longtail and life portfolios, strengthening reserves, and reinforcing pricing governance to enhance balance sheet resilience and long-term sustainability. 2:44 2 minutes, 44 seconds Market outcomes at recent renewals have become increasingly influenced by individual portfolio performance rather 2:52 2 minutes, 52 seconds than broad cyclical momentum. While competitive pressures are incrementally returning, pricing remains broadly 2:59 2 minutes, 59 seconds rational where riskadjusted returns are appropriately compensated. The prevailing focus across the sector is 3:06 3 minutes, 6 seconds therefore on margin protection rather than volume expansion for investors. 3:11 3 minutes, 11 seconds This environment emphasizes the importance of underwriting quality capital discipline and consistent execution. GIC remains aligned with 3:20 3 minutes, 20 seconds these principles through continued portfolio optimization, prudent risk appetite and a strong capital position. 3:27 3 minutes, 27 seconds Against this backdrop, I will now highlight our financial performance for the quarter and the 9 months ended 31st December 2025. 3:38 3 minutes, 38 seconds Gross premium income for the Q3 FI26 today rupes 10,986.55 cr as compared to rups 9,967.71 3:48 3 minutes, 48 seconds cr in the corresponding quarter of the previous year. Income claim ratio for the quarter is 87.9 3:56 3 minutes, 56 seconds as against 87.8 in the previous corresponding quarter of the previous year. Combined ratio for the quarter stood at 105.32 compared to 107.83. 4:09 4 minutes, 9 seconds Adjusted combined ratio improved to 85.08% for 9 months as against 89.12% 4:18 4 minutes, 18 seconds for the similar period of the previous year. Investment income for Q3 FI26 rupees 2,924.47 4:26 4 minutes, 26 seconds 47 cr compared to rups 2627.17 cr in the corresponding quarter of the previous year. 4:35 4 minutes, 35 seconds Profit before tax for the quarters to date rupes 216.93 cr compared to 2168.69 4:43 4 minutes, 43 seconds cr. Profit after tax for the quarters to date rupees 18.92 cr compared to rups 1,621.35 4:52 4 minutes, 52 seconds cr. Solveny ratio improved to 3.8. 87 as of 31st December 25 compared to 3.52 as at 31st December 2024. 5:05 5 minutes, 5 seconds Net worth excluding fair value change recorded at rupes 48,490.40 cr as on 31st December 25 compared to 5:14 5 minutes, 14 seconds rups 40,745.48 cr as on 31st December 2024. 5:20 5 minutes, 20 seconds Net worth including fair value change today rups 92,56.08 08 cr compared to rups 85,83.69 5:29 5 minutes, 29 seconds cr in the previous year. And the premium breakup domestic premium for 9 months is rups 25,388.97 5:38 5 minutes, 38 seconds cr and international premium is rupes 7,587.29 cr with a percentage fleet of 77% 5:45 5 minutes, 45 seconds domestic and 23% international. Before concluding, I would like to thank our shareholders, clients, and employees for their continued confidence and support. 5:53 5 minutes, 53 seconds Looking ahead, we anticipate further normalization of market conditions with financial performance increasingly driven by disciplined underwriting and 6:02 6 minutes, 2 seconds effective claims management rather than cyclical pricing tailwinds. 6:06 6 minutes, 6 seconds While this may moderate growth rates, it supports the delivery of stable and sustainable returns over the long term. 6:14 6 minutes, 14 seconds Thank you. We can now move to questions and answers. 6:18 6 minutes, 18 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 6:26 6 minutes, 26 seconds star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are 6:34 6 minutes, 34 seconds requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 7:06 7 minutes, 6 seconds Participants who wish to ask a question may press star and one on the touchstone telephone. 7:14 7 minutes, 14 seconds Participants who wish to join the question queue may press star and one on their touchstone telephone. 7:51 7 minutes, 51 seconds The first question is from the line of Janesa, an individual investor. Please go ahead. 8:01 8 minutes, 1 second Yes sir. Thank you for the opportunity and uh congratulations for the good set of numbers. Uh two three questions. Uh 8:10 8 minutes, 10 seconds one uh with regard to the combined ratio which is now coming more closer to 106 8:19 8 minutes, 19 seconds and uh how do you see the trend going ahead especially in this year uh and uh 8:27 8 minutes, 27 seconds we have a target of uh reaching up to 100% uh next few years. So how are we uh 8:35 8 minutes, 35 seconds how are we tracking that uh for next couple of years uh given the international book now will start 8:43 8 minutes, 43 seconds contributing the new book actually will start contributing to uh in the next from next year onwards that is first 8:51 8 minutes, 51 seconds part second if you can just uh give some understanding about uh the book comp 8:58 8 minutes, 58 seconds book comp uh composition I think you have right now some 38% of your revenue 9:04 9 minutes, 4 seconds now coming from obligatory uh segment and how is how is the combined ratio out there I'm saying see you have you have 9:13 9 minutes, 13 seconds been shing the combined ratio for international and domestic but when it comes to obligatory and non-obligatory 9:21 9 minutes, 21 seconds parts if you can give a little bit of a more understanding that will be helpful and also your outlook on uh the 9:28 9 minutes, 28 seconds obligatory part how is Uh how do you see how do you see the uh mean the 9:35 9 minutes, 35 seconds narratives uh or uh the discussions with the government with regard to continuing with the same set or same rate of 9:43 9 minutes, 43 seconds obligatory or there's likely to be a reduction in uh that rate as well uh in the near future or maybe in the medium 9:52 9 minutes, 52 seconds term uh that will be helpful. Thank you sir. 9:57 9 minutes, 57 seconds Thank you. Uh regarding your first question, how the year will pan out? Uh as we have been advising the investing 10:06 10 minutes, 6 seconds community that fourth quarter tends to be benign, tends to be better uh than the three quarters. So the result of the three quarter should 10:14 10 minutes, 14 seconds largely largely be carried forward into the fourth quarter. Uh our guidance for 10:21 10 minutes, 21 seconds achieving about a percentage improvement in each of the year stands. 10:27 10 minutes, 27 seconds I would like to disagree on your statement that we are trying to move closer to 100%. There are two parts to our portfolio domestic and foreign. We 10:36 10 minutes, 36 seconds would certainly like to move below 100 particularly for foreign book but that will not be an uh a realistic uh target 10:44 10 minutes, 44 seconds or a strategy for domestic business because the investment income on both the portfolios are fundamentally different. So we will continue with our 10:53 10 minutes, 53 seconds guidance of about 1% improvement on a composite portfolio rather than trying to achieve 100% for say domestic or foreign. 11:04 11 minutes, 4 seconds As regards obligatory combined ratio uh that is a proportional book we would say that it is fairing decently and reasonably well. 11:15 11 minutes, 15 seconds on our non-obligatory book we also have facultative non-proportional treaties proportional 11:22 11 minutes, 22 seconds treaties and the book is fairly diverse given the diverse composition of non-obligatory which is as I mentioned 11:31 11 minutes, 31 seconds proportional treaty non-proportional treaty fact and miscellaneous kinds of covers as against obligatory a straight 11:39 11 minutes, 39 seconds comparison of the combined ratio across these two segments will not be fair uh nonobl Obligatory is definitely most 11:46 11 minutes, 46 seconds certainly supposed to fare better than the obligatory given the composition. 11:51 11 minutes, 51 seconds Coming to your third question regarding the obligatory how it will move. Uh we can probably expect that given the 11:59 11 minutes, 59 seconds geopolitical disturbances uh stability may be uh targeted by the government but this policy decision is 12:08 12 minutes, 8 seconds in the realm of the regulator and uh we present our views and industry players also present their views. beyond that it 12:16 12 minutes, 16 seconds will not be correct on our part to speculate. 12:22 12 minutes, 22 seconds Okay. Because I think that is one uh one area where uh the clarity is little less 12:28 12 minutes, 28 seconds and I think uh it may not be I'm saying when we are looking at the value stock performances or basically the valuation 12:37 12 minutes, 37 seconds that weighs a little more uh when it comes to the value unlocking for the company. uh so that will I mean that is 12:44 12 minutes, 44 seconds something where uh when we seek a little better cl I think we uh if a better clarity is available that will help in 12:53 12 minutes, 53 seconds uh maybe unlocking the value uh in in in in the company uh let me just expand on this probably 13:01 13 minutes, 1 second we would have touched upon this in earlier calls and uh in our other meetings with the investing community if obligatory goes away or gets reduced it 13:10 13 minutes, 10 seconds is not a straight loss of business a substantial part something like probably 25 to 50% will get readily converted 13:18 13 minutes, 18 seconds into voluntary business non-obligatory business. So it is not a say win nor lose it. There is there is a nuance to 13:26 13 minutes, 26 seconds how the business will develop. We will have more freedom in how we write uh capital our capital deployment will be 13:33 13 minutes, 33 seconds free and particularly those companies which are uh playing close to their targeted solveny reg targeted solveny 13:43 13 minutes, 43 seconds range they will definitely need a substitute reinsurance requirement immediately. Say a company which is uh 13:50 13 minutes, 50 seconds running at a solvency of 1.65 and they would like to continue to be at 1.65 any change in I mean obligatory or 13:59 13 minutes, 59 seconds a reinsurance arrangement will get replaced by another set of reinsurance arrangement. 14:04 14 minutes, 4 seconds I hope it uh alleviates your apprehensions to an extent. 14:09 14 minutes, 9 seconds Yeah. Yeah. Yeah. Thank you for this clarity. And uh maybe the last question is on the growth. I mean you said uh you 14:17 14 minutes, 17 seconds would be more calibrated in uh the in growing the book. Uh can you give some more color to it as to for the next year 14:25 14 minutes, 25 seconds and for FY28 how do you see the book growth likely to be because you focus more on quality and 14:33 14 minutes, 33 seconds as you alluded that 100% uh 1% is a decrease uh in a uh in a combined ratio is a target uh which the company would like to follow. So what does it mean? 14:46 14 minutes, 46 seconds How how will it be balancing the growth and the profitability? If you can just give some understanding with that that's uh thank 14:55 14 minutes, 55 seconds so the growth of the corporation would mostly at least mirror the growth of the Indian 15:02 15 minutes, 2 seconds reinsurance market. Even the growth of the Indian insurance market say in the range of something like 9 to 12% or 15:09 15 minutes, 9 seconds higher that is a nominal growth uh substantial part of this growth will also get mirrored in the reinsurance market. As far as Indian insurance 15:18 15 minutes, 18 seconds market is concerned given our broad strategic goal of maintaining our market share we will be mirroring the growth of Indian reinsurance market. 15:27 15 minutes, 27 seconds Coming to the international book given that now we got our rating back last year October 24 previous financial year 15:37 15 minutes, 37 seconds uh whatever business was lost it it cannot be uh reclaimed or uh regained in a single year because when we moved off 15:46 15 minutes, 46 seconds the panel of certain insurance companies say in Japan or Taiwan we can't just walk back at the same on the same panel 15:55 15 minutes, 55 seconds with the same share so there is a clawback And it takes a time maybe it can take something like 3 to 5 years. So 16:03 16 minutes, 3 seconds to the extent GC has had relationship with all the students in the 16:15 16 minutes, 15 seconds ladies and gentlemen sorry the line of the management has been disconnected. Please allow me a moment while I reconnect the management. 16:25 16 minutes, 25 seconds Thank you. 16:36 16 minutes, 36 seconds Heat. Heat. 17:10 17 minutes, 10 seconds ladies and gentlemen the line of the management has been reconnected. Thank you. 17:18 17 minutes, 18 seconds Hello. Yes sir you can. Yes sir. 17:21 17 minutes, 21 seconds Yeah apologies for the disruption. So as I was saying that whatever business we have lost thanks to the downgrade that will be reclaimed over a period of 17:29 17 minutes, 29 seconds something like 3 to 5 years. So that certainly presents uh opportunity for us to to rebuild those relationships which 17:37 17 minutes, 37 seconds were affected and of course our uh uh medium-term objective in terms of the composition of the risk 17:46 17 minutes, 46 seconds book remains at 6040. So we will continue to focus on the international book and that should re result into uh 17:54 17 minutes, 54 seconds growth apart from the normal growth of the global reinsurance market. 18:01 18 minutes, 1 second Probably to sum up one can expect a growth rate in the medium-term on an annual basis of something like 8 to 10%. 18:09 18 minutes, 9 seconds Composite. Okay, understood. Thank you sir. Yes. 18:18 18 minutes, 18 seconds Thank you. Participants who wish to ask a question may press star and one on the touchstone telephone. The next question 18:27 18 minutes, 27 seconds is from the line of Madukar Lha from JP Morgan. Please go ahead. 18:33 18 minutes, 33 seconds Hi uh good morning. Uh congratulations on uh good numbers uh on the 18:39 18 minutes, 39 seconds international book. I had a question. Uh see in some segments I see very high 18:46 18 minutes, 46 seconds combined ratio uh like motor like I think this time around the combined ratio is about 190 uh%. 18:57 18 minutes, 57 seconds Um cargo is at about 282% life also is quite high at you know 19:05 19 minutes, 5 seconds closer to 138 and u health as well as at about 143. So some of these segments we're seeing very high combined issues 19:14 19 minutes, 14 seconds um on the inter and on the international side what I want to understand is what is going to be our strategy in terms of 19:21 19 minutes, 21 seconds you know improving the underwriting uh yeah how can we change the product mix of here 19:28 19 minutes, 28 seconds um yeah thanks so I agree with your observations and I think whatever three classes you have 19:36 19 minutes, 36 seconds picked up they are uh points they are the segments where we need to focus. We are mindful of that. Uh I think we have 19:45 19 minutes, 45 seconds addressed the explanation for the life higher combined ratio in the Q2. 19:50 19 minutes, 50 seconds Uh this cargo and uh motor both are definitely under management focus and we 19:57 19 minutes, 57 seconds have already taken certain steps and uh we expect that those steps in terms of underwriting discipline will bear fruit 20:06 20 minutes, 6 seconds going forward. I think if you if you compare this not on a quarterly basis but on an annual basis there is a 20:14 20 minutes, 14 seconds distinct trend in terms of the improvement in performance for foreign book as well as for domestic book and I would like to say that for 9 months 20:23 20 minutes, 23 seconds overall foreign book has shown better improvement in terms of performance. So management is absolutely focused on 20:31 20 minutes, 31 seconds these segments that you have identified motor cargo and also life. We are working it is a work in progress. Uh 20:40 20 minutes, 40 seconds whatever we have done has bore fruit and we expect it to improve meaningfully going forward. 20:49 20 minutes, 49 seconds Uh just if I may uh ask um you know where is this motor business uh coming 20:55 20 minutes, 55 seconds from like uh the motor and cargo um cargo may be a little bit of oneoff also 21:02 21 minutes, 2 seconds but especially u you know uh which part of the world is this and you know 21:13 21 minutes, 13 seconds hello this is uh Sanjay Mokashi Hello, this is Sanjay Mukari, chief underwriting officer. 21:23 21 minutes, 23 seconds uh motor constitutes about uh uh about 11% of our foreign book and it comes 21:32 21 minutes, 32 seconds from various regions but uh I will name the peak regions will be Israel and Turkey 21:41 21 minutes, 41 seconds and the cargo business is also from these two region in addition to that it comes from China but I'm only 21:48 21 minutes, 48 seconds highlighting the uh major countries otherwise we write business worldwide. 21:55 21 minutes, 55 seconds There are exposures in uh Europe as well. 22:02 22 minutes, 2 seconds I hope that answers your question. Sure. Sure. Thank you and all the best. 22:11 22 minutes, 11 seconds Thank you. 22:13 22 minutes, 13 seconds Thank you. Participants who wish to ask a question may press star and one on the touchstone telephone. 22:24 22 minutes, 24 seconds The next question is from the line of Sankit Godha from Aendas Park. Please go ahead. 22:31 22 minutes, 31 seconds Uh yes, thank you for the opportunity. 22:34 22 minutes, 34 seconds Uh sir, just wanted to understand uh uh the pricing environment. Uh maybe last 22:42 22 minutes, 42 seconds year uh uh there was a kind of uh price benefit in the fire segment. Uh but what 22:49 22 minutes, 49 seconds we learned is that in in small summer shorts or or midsummers the pricing competition has increased and and and do 22:57 22 minutes, 57 seconds you think even on the larger some assured uh uh uh fire capacities uh uh 23:05 23 minutes, 5 seconds the pricing environment will will hold up in the current uh what what's during the current year will hold up in the next year or or it will it it will uh 23:14 23 minutes, 14 seconds we'll see more competition. So, so, so just just a color on the pricing and and on similar lines uh on overseas business 23:21 23 minutes, 21 seconds too if you can again give a color uh uh given Janet revolves would have happened. Uh uh any any color you have 23:29 23 minutes, 29 seconds on on how rising environment is playing out it is still still hard market or or or still still a uh a a a uh soft market 23:37 23 minutes, 37 seconds to to to assume that the command is in the foreign business will improve. That that's my first question. 23:45 23 minutes, 45 seconds Yes, Sankit. This is Sanjay Mukashi uh chief underwriting officer. 23:50 23 minutes, 50 seconds Uh your observation on pricing environment in property uh segment especially in the small uh property 23:57 23 minutes, 57 seconds segment is is accurate that there is heavy competition among insurers uh insurers there and uh as a result uh uh 24:07 24 minutes, 7 seconds it is putting pressures on the pricing on large risks. The uh impact on pricing 24:14 24 minutes, 14 seconds is also seen because there is competition wherever it is reinsurancedriven. 24:21 24 minutes, 21 seconds Uh there is competition among reinsurers but there are certain segment which are holding fairly fairly well. uh for 24:29 24 minutes, 29 seconds example uh uh refineries or uh energy energy segment where uh uh although the 24:36 24 minutes, 36 seconds pricing uh uh is under pressure it is not as much as in other other segment within the property. Uh as a reinsurer 24:45 24 minutes, 45 seconds uh we are keeping a close watch on the uh pricing uh uh of uh on the direct direct side. uh and uh we have uh uh 24:55 24 minutes, 55 seconds handles uh uh in our reinsurance contract which uh which will uh fairly protect us uh if if uh the loss ratio is 25:05 25 minutes, 5 seconds decline uh is uh deteriorating steeply on the overseas January 1st renewal uh 25:14 25 minutes, 14 seconds it was soft uh we had got some indication because we are uh we are part of uh some of the conversations before 25:22 25 minutes, 22 seconds that happened before the renewal and uh we were bracing for the soft uh softness 25:29 25 minutes, 29 seconds of the market. But we observed that the uh uh there is plenty of capacity, plenty of capital in the uh in the 25:37 25 minutes, 37 seconds market and therefore there were heavy pressures on uh on the shares. Uh the uh 25:45 25 minutes, 45 seconds we we wanted to write uh good shares but uh we could not. Eventually ouruh shares got reduced. It is called signing loan. 25:54 25 minutes, 54 seconds So signing pressures were there on our uh uh our uh our business but uh we 26:01 26 minutes, 1 second could write some more business also uh which which balanced the on the income side. So in a way our foreign book 26:09 26 minutes, 9 seconds became little more broad-based than what it was before. 26:15 26 minutes, 15 seconds Understood. So basically uh so the the command ratio what you reported say 121 percentage for 9 months which is 26:23 26 minutes, 23 seconds definitely a better number compared to last year uh if if the market is soft uh say say next year uh then then it's safe 26:30 26 minutes, 30 seconds to say that uh to to to maintain 120 also will be an an an an immediate 26:38 26 minutes, 38 seconds target or or you think that number can improve or or rather deteriorate if the market is soft. 26:45 26 minutes, 45 seconds We feel that this number will improve because our uh approach to risk selection, our approach to underwriting 26:52 26 minutes, 52 seconds hasn't changed. Even uh in this soft market cycle, we have been able to fairly uh uh maintain our position in 27:00 27 minutes terms of uh other uh terms and conditions on the contract. uh wherever uh uh we were not chasing premium uh in 27:09 27 minutes, 9 seconds in this soft market cycle because it would not make sense and our target as our uh uh executive director additional 27:17 27 minutes, 17 seconds charge CMD said that our target is to improve 1% uh point per perom on the 27:24 27 minutes, 24 seconds combined combined ratio uh our uh uh property portfolio is almost uh 70% of 27:34 27 minutes, 34 seconds our foreign in book and this is where uh our uh uh underwriting discipline should be more focused and that is what we are doing. 27:44 27 minutes, 44 seconds Understood sir. So so um okay so so basically uh His you said in the call that uh that that rating benefit will 27:52 27 minutes, 52 seconds play out in 3 four years rather than on immediate basis. uh so so so if if it plays out at at a full potential say in 27:59 27 minutes, 59 seconds 3 four years this 120 combined issue uh you think uh it it will improve to 110 28:06 28 minutes, 6 seconds or or or uh I'm not saying 100 but but maybe 1105 kind of a number possible uh sir because because you already saw a 28:13 28 minutes, 13 seconds 10% delta improvement in the combined in international business in the current year another 10% is about 2 three years is possible 28:21 28 minutes, 21 seconds see the rating and these these are absolutely different uh when we are saying that we will regain our business and we will rebuild 28:30 28 minutes, 30 seconds our earlier position in the market, it is with reference to the credit rating. 28:35 28 minutes, 35 seconds The combined ratio performance is more about the overall pricing environment, terms and conditions environment and the 28:45 28 minutes, 45 seconds development of climate related risk and the changes that have taken place since 2023 in terms of the 28:53 28 minutes, 53 seconds share of risk boned by a insurance company and a reinsurance company. 28:58 28 minutes, 58 seconds So when I said about rating, I was talking about our growth and our market share which we should be able to restore 29:05 29 minutes, 5 seconds and we should also be able to access other markets uh based on our a rating and uh the underwriting discipline is more on the operating performance side. 29:15 29 minutes, 15 seconds So I would like to say that these are two separate things and alongside the growth and restoration of the market share improvement in performance can 29:23 29 minutes, 23 seconds certainly go on. They can defin definitely run in parallel. There is no contradiction there. 29:29 29 minutes, 29 seconds Okay. The reason I asked this question is that rating upgrade probably gives you a potential to better contracts access which was not possible in the 29:37 29 minutes, 37 seconds past. So so indirectly it improves the quality of the book and and therefore the combined can improve. So though I was coming from that perspective that naturally it will contribute to the 29:45 29 minutes, 45 seconds growth but but the growth will come along with the improvement in the combined maybe maybe credit rating gives you access to better quality contracts. 29:54 29 minutes, 54 seconds Yes, we expect that. 29:56 29 minutes, 56 seconds Okay, understood sir. And and the and the second thing sir in in in in the domestic business uh one thing just I wanted to check was that your motor uh I 30:05 30 minutes, 5 seconds don't know at overall level motor has done well uh uh uh uh or or or even even domestic business motor has at overall 30:14 30 minutes, 14 seconds sorry motor has done well. So, so is it is it largely um uh mean any I mean the growth of 30:21 30 minutes, 21 seconds around 17%age in the motor is is generally very high or or even compared to the underlying market of the domestic business it seems to be in line or 30:29 30 minutes, 29 seconds little better than the industry. So, so I just wanted to understand what led to this thing. Uh are there specific risks 30:36 30 minutes, 36 seconds which are getting reinsured or or or because of uh uh long-term 30:43 30 minutes, 43 seconds policies people want to reinsure and and therefore therefore that that is driving your growth or or you gain market share. 30:50 30 minutes, 50 seconds So any any color on that number will be useful and and second thing on your view on agree again uh because because this number has been consistently coming off 30:59 30 minutes, 59 seconds for us compared to what we were doing in the past uh even even in the current year it's just like a marginal growth year on year uh and and next year is a 31:07 31 minutes, 7 seconds new tendering cycle I don't know whether the new formula will be based on 80 110 or or I'm not sure on that part uh then 31:15 31 minutes, 15 seconds then how do you foresee the crop business playing out for you for uh next uh year in that sense. 31:24 31 minutes, 24 seconds Uh Shank uh on motor uh domestic uh the growth is a mix. The uh motor 31:34 31 minutes, 34 seconds domestic almost 84% or 85% is obligatory. So the growth in the market 31:41 31 minutes, 41 seconds on the direct side will get reflected in obligatory. But we also write motor reinsurance uh is uh uh is uh more 31:51 31 minutes, 51 seconds proportional where the in income comes comes from and uh it is a combination of 31:58 31 minutes, 58 seconds this uh motor proportional as well as obligatory that has resulted in growth growth in motor business. And uh coming 32:08 32 minutes, 8 seconds to your question on uh agriculture uh yes uh we are waiting for the new uh 32:16 32 minutes, 16 seconds tender cycle. We have been part of uh the committee that was constituted for uh uh getting inputs on uh on uh on the 32:26 32 minutes, 26 seconds agriculture segment. Uh the uh the uh experience uh in the in the last year 32:33 32 minutes, 33 seconds was uh was different to uh to the previous years. 32:37 32 minutes, 37 seconds uh we we are in in touch with all the all the cedants and including Agriculture Insurance Company Limited 32:45 32 minutes, 45 seconds and we are we are ready to uh to support the market in whichever form they they require. We expect that cup and cap 32:53 32 minutes, 53 seconds model in a different uh uh different way will continue. 33:00 33 minutes uh but but uh but most likely whether it will be a paninding adoption of AT110 or a singular kind of a structure given then then it reduces the reinsurance 33:08 33 minutes, 8 seconds opportunity to us. So so I just wanted to understand whether whether whether pan India it will go in that way or or you still think there will be states available for for reinsurance. 33:19 33 minutes, 19 seconds It is going pan India is a little unlikely because different states have different preferences and uh also some 33:28 33 minutes, 28 seconds of the states have seen uh the benefits of burn cost uh method. So uh uh so it 33:35 33 minutes, 35 seconds it uh it is difficult to speculate at this stage. Let us uh let us wait uh for the outcome. uh we will uh write uh we 33:44 33 minutes, 44 seconds will avail the uh opportunities in best possible way and support the Indian market. 33:50 33 minutes, 50 seconds I will just add here that uh if at all you analyze the trend probably there are quite a few players on 80 110 already 33:59 33 minutes, 59 seconds and now probably they are thinking of switching to 6130 right so probably the that phase where 34:06 34 minutes, 6 seconds reinsurance was not required it is done there is a saturation and now there is a probably U-turn there are there are 34:14 34 minutes, 14 seconds there are other models which are being considered as I said 6130 or something else which will definitely 34:22 34 minutes, 22 seconds increase more risk by the insurance companies and more reinsurance. 34:28 34 minutes, 28 seconds Understood. But but but in in 6130 then then probably will see more XL covers rather than than than proportional covers which was a good driver in the past. 34:38 34 minutes, 38 seconds It will entirely depend Sankit on whether 6130 will be at burn cost or the traditional cup and cap. If it is one 34:47 34 minutes, 47 seconds cost there will be demand for proportional treaties as well. 34:50 34 minutes, 50 seconds Understood sir. And and lastly lastly uh maybe to to to uh extend the first question which I asked uh in in maybe uh 34:58 34 minutes, 58 seconds if if uh if guys are coming and asking for the uh renewals in the commercial lines especially fire and engineering segment are are you are still pitching 35:08 35 minutes, 8 seconds the burning cost as a benchmark for for the reinsurance or or or the market is still soft for the higher higher ticket size assurance also? 35:17 35 minutes, 17 seconds in the uh property segment. Uh while answering earlier question, I did mention that we will use the reinsurance 35:26 35 minutes, 26 seconds handles that are available to us to ensure that uh we we do that tightroppe walking of uh protecting our balance 35:34 35 minutes, 34 seconds sheet at the same time supporting the insurance uh companies. I'm afraid beyond that uh we cannot discuss our 35:42 35 minutes, 42 seconds strategies in detail and we will uh we will take we will look at each contract 35:48 35 minutes, 48 seconds uh based on its own merit s uh thanks thanks for your answers. 35:57 35 minutes, 57 seconds Thank you. Participants who wish to ask a question may press star and one on the touchstone telephone. The next question 36:05 36 minutes, 5 seconds is from the line of Sharma from HDFC Securities Limited. Please go ahead. 36:12 36 minutes, 12 seconds Yeah. Hi sir, thanks for the opportunity. I have two questions. 36:14 36 minutes, 14 seconds Firstly is on the motor side of the business. So if you can give us some color around the how the loss is on the motor side of business has been shaping 36:22 36 minutes, 22 seconds up for you and secondly on the OD side we have seen direct side insurance have witnessed an impact on the loss ratio and it is primarily because the net cut 36:31 36 minutes, 31 seconds impact in the lower IDV. So can you share your experience on that and uh how do you see that as a business opportunity for you because as one of 36:38 36 minutes, 38 seconds the uh industry player who used to retain uh most of the risk on their net has also started seeding. So this is my question on the motor side. Secondly 36:47 36 minutes, 47 seconds coming to the health business we have seen we have been de-risking ourself on the this side of business or time because of the uh profitability it 36:55 36 minutes, 55 seconds offers. So can you give us some color around the color of this book whether how much of this is obligatory in nature and how much of it is non-obligatory and 37:04 37 minutes, 4 seconds are we losing good business on the table on this side 37:15 37 minutes, 15 seconds coming to uh motor business uh shvit uh as I mentioned uh while 37:23 37 minutes, 23 seconds answering previous question uh on the domestic side. A large uh portion of our business is obligatory and uh the market 37:32 37 minutes, 32 seconds uh results will get mirrored in our obligatory results. But we also participate on many proportional and 37:40 37 minutes, 40 seconds non-proportional treaties and uh where our our focus uh is uh to ensure that uh 37:46 37 minutes, 46 seconds the book is uh profitable and uh as a as a result uh on an uh uh for the domestic 37:55 37 minutes, 55 seconds business uh if if you if you see our our 38:01 38 minutes, 1 second uh incurred claim ratio uh hasn't uh hasn't changed much as compared through previous uh previous year. But yes on 38:09 38 minutes, 9 seconds motor foreign uh we have uh encountered uh issues with uh the international business there that we write mainly from 38:18 38 minutes, 18 seconds Israel and Turkey where some reserve strengthening has been happening and as a result the motor international 38:25 38 minutes, 25 seconds business uh has seen negative uh negative results but we have taken care of that. We are closely monitoring and 38:33 38 minutes, 33 seconds on 1st January uh while renewing uh the international motor business we have ensured that we derisk the portfolio and 38:42 38 minutes, 42 seconds uh realign our shares so that uh there is uh uh there is a turnaround in motor 38:48 38 minutes, 48 seconds business uh result. Coming to your uh question on uh uh on health uh health 38:56 38 minutes, 56 seconds segment uh uh almost uh 64% of the uh health uh 39:05 39 minutes, 5 seconds business is obligatory and uh that will uh again mirror the uh results of the of the market. In 39:13 39 minutes, 13 seconds addition to that uh uh wherever there are opportunities in supporting uh insurance companies uh health is not 39:22 39 minutes, 22 seconds greatly reinsurancedriven but there are many proportional treaties and there are many government schemes where the insurance companies require reinsurance 39:32 39 minutes, 32 seconds support but uh uh we we extend our support only where it makes sense for us 39:38 39 minutes, 38 seconds on on reinsurance basis and therefore on the non-obligatory segment in terms of business volume. There would be some 39:46 39 minutes, 46 seconds volatility that we we always witness but but we are okay with that because eventually our objective is to look at 39:55 39 minutes, 55 seconds the combined ratio and uh ensure that uh we our combined ratio is tolerable or it is it is improving. 40:04 40 minutes, 4 seconds Uh I would just like to add here about the observation that you made and I think it is a fairly uh good observation 40:11 40 minutes, 11 seconds from your side that motor is can emerge as a significant opportunity. I think it is one of the segments which will get 40:19 40 minutes, 19 seconds affected by the climate change more flood events and it definitely presents an opportunity. So of course we have 40:26 40 minutes, 26 seconds ample capacity you know that we are in a very good position in terms of the solvency and we'll be definitely 40:33 40 minutes, 33 seconds exploiting this opportunity to the extent it develops. 40:38 40 minutes, 38 seconds So just a small followup because we are now in the ongoing uh renewal uh renewal season with the Indian insurer. So have you seen uh the OD renew OD seeding 40:47 40 minutes, 47 seconds coming into the discussions during the current renewal cycle? 40:51 40 minutes, 51 seconds The discussions uh are happening as we speak uh and usually the companies uh buy uh their reinsurance on a 41:01 41 minutes, 1 second combined basis. Uh the yes the non-proportional treaties the catastrophic exposures are basically for 41:08 41 minutes, 8 seconds OD segment. Uh but yes we we are we are discussing and we'll see how it pans out. 41:16 41 minutes, 16 seconds Okay sir. These are these are my questions. Thank you and all the best. Thank you. 41:22 41 minutes, 22 seconds Thank you. Participants who wish to ask a question may press star and one on the touchstone telephone. The next question 41:31 41 minutes, 31 seconds is from the line of Karthiken an individual investor. Please go ahead. 41:38 41 minutes, 38 seconds Um hi uh thanks for the opportunity. Uh I have uh couple of questions. Uh one is with respect to the obligatory business. 41:48 41 minutes, 48 seconds So what uh you are making now answer to the the first uh question right the first question is you you mean to say 41:57 41 minutes, 57 seconds that the when the obligatory percentage comes down it is better for the company I mean it'll free up capital and improve profitability is that understanding 42:04 42 minutes, 4 seconds correct I think it will be a very simple 42:11 42 minutes, 11 seconds evaluation if we say it is good or bad because obligatory gives us an opportunity in terms of a 42:19 42 minutes, 19 seconds sizable premium volume and the attendant flot that we can get. So the benefit is is in terms of the diversification and 42:28 42 minutes, 28 seconds the investment income. At the same time we are not able to choose the risk. The good comes with the bad and it is a market performance. So we don't have the 42:36 42 minutes, 36 seconds freedom to write the way we would ideally would like to write. So there are pluses and minuses and overall we are of the opinion that it balances out. 42:47 42 minutes, 47 seconds So it is not say very say white or black because uh this is a proportional contract and we also have a sizable 42:55 42 minutes, 55 seconds non-proportional book and a facultative book. 42:59 42 minutes, 59 seconds Uh I'm not sure whether I have answered your question but you can come up with a followup question. 43:04 43 minutes, 4 seconds I I understand sir so it gives gives us more freedom and all that but uh so I I'm just again uh say tomorrow it it 43:12 43 minutes, 12 seconds comes down to say I mean it is currently 4% it comes to 2%. So will that improve our uh business profile or uh what's the 43:19 43 minutes, 19 seconds outlook on that and say comes down by 50%. Going forward as I said part of the business lost will 43:26 43 minutes, 26 seconds get replaced by the voluntary business and it depends on where do we deploy our capacity and what is the dynamics of 43:34 43 minutes, 34 seconds that suppose we transfer this capacity which is given to obligatory which is a proportional contract to a non-proportional contract or an 43:41 43 minutes, 41 seconds international contract. So the different segments of the market present different levels of volatility and attendant 43:48 43 minutes, 48 seconds return on equity. So it is essentially a job of an underwriter to match the return on equity with the volatility 43:55 43 minutes, 55 seconds that we are writing. So if we are able to deploy this capital alternatively in a say equally attractive or a more attractive segment of say international 44:03 44 minutes, 3 seconds catastrophe non-proportional we would be better off. 44:08 44 minutes, 8 seconds Okay. Got it. Yeah I I understand completely. Thank you. And and the next question uh see uh you know in the past 44:16 44 minutes, 16 seconds uh CEO is comment saying that you know there's a lot of fraud and all that is happening in the the insurance market. 44:23 44 minutes, 23 seconds What kind of tools are we deploying to you know detect that and you know mitigate those kind of uh problems. 44:30 44 minutes, 30 seconds See, I would like to say that uh uh this is at the heart of the industry and it is a perennial problem. The 44:38 44 minutes, 38 seconds adverse selection and the moral hazard and uh whatever can be done can be essentially done only on the direct side. Uh motor and health are two 44:46 44 minutes, 46 seconds classes where there is a tremendous scope for deploying claims management practices. The AI and there are various tools and techniques just as we have our tools and techniques as a reinsurer. 44:56 44 minutes, 56 seconds There are so many claims management techniques which are differently adopted by different players in the market. But as a reinsurer we are our support is essentially at a say uh portfolio level. 45:09 45 minutes, 9 seconds Our say 90% plus premium is and exposures are coming from prop and non-prop treaties. So fraud is 45:18 45 minutes, 18 seconds essentially a domain of the insurance companies. Unless you highlight something specific, we can probably discuss on the call or offline. But I 45:26 45 minutes, 26 seconds believe it is the domain of the insurance companies. 45:29 45 minutes, 29 seconds Okay. Sorry. Yeah. Specifically I probably I can send a email. Please. Yes. Sure. Yeah. 45:36 45 minutes, 36 seconds And and the health right. I mean even the market is you know growing uh uh for this year. I mean the 9 months I there's 45:43 45 minutes, 43 seconds more than I mean 15% growth right for the primary uh company but whereas we have degrone. Any any specific reason for that? 45:55 45 minutes, 55 seconds uh health uh the non-obligatory portion is uh is quite volatile as uh in terms of 46:03 46 minutes, 3 seconds uh uh volumes. If we uh uh don't renew a particular uh contract which has 46:09 46 minutes, 9 seconds significant uh volumes uh we we tendu end up degrowing. Our focus will always 46:16 46 minutes, 16 seconds be on uh on the contract that will make sense to us and uh uh we uh we may win 46:24 46 minutes, 24 seconds some, we may lose some uh but but yes uh it is it is the dynamics uh that will play out and uh uh manifest into degrowth or growth. 46:34 46 minutes, 34 seconds I would like to just add here that uh it is not necessarily that when 46:44 46 minutes, 44 seconds ladies and gentlemen the line of the management has been disconnected. Please stay connected while we reconnect the management. Thank you. 47:37 47 minutes, 37 seconds ladies and gentlemen. Thank you for your patience. The line of the management has been reconnected. Over to you, sir. 47:45 47 minutes, 45 seconds Apologies again for the disconnection. 47:47 47 minutes, 47 seconds uh as I was mentioning that it is not necessarily that when we say when we lose a particular segment of premium it is that somebody else has walked away. 47:56 47 minutes, 56 seconds See this health side the insurance companies may also restructure their entire reinsurance purchase. So it is 48:04 48 minutes, 4 seconds quite possible that on a large contract a particular insurance company decides to buy it differently or not buy at all 48:11 48 minutes, 11 seconds and in that case if that particular purchase is uh replaced by self retention we might have volatility as 48:19 48 minutes, 19 seconds our CEO pointed out that this is a fairly volatile segment. So that it is not necessarily that we are losing market share or we are losing business. 48:28 48 minutes, 28 seconds It can also be that insurance companies are retaining more. Thank you. 48:34 48 minutes, 34 seconds Okay sir. Got it. I mean all my questions have been answered. Uh thank you and all the best. Thank you. Thank you. 48:43 48 minutes, 43 seconds Thank you. 48:45 48 minutes, 45 seconds Participants who wish to ask a question may press star and one on the touchstone telephone. 49:16 49 minutes, 16 seconds The next question is from the line of Retika Dua from Bandhan. Please go ahead. 49:23 49 minutes, 23 seconds So thank you for the opportunity and uh congrats on a set of results. So just one question left uh on this cat reserve 49:30 49 minutes, 30 seconds uh we have mentioned in the notes two accounts where are we today on an outstanding basis. 49:39 49 minutes, 39 seconds The question is not clear what is outstanding basis. 49:42 49 minutes, 42 seconds So as in uh we said that in notes to account that we are going to continue to create this uh reserve till the time we create a particular kitty. So uh what is 49:51 49 minutes, 51 seconds the outstanding uh uh reserve that we have already created? 49:56 49 minutes, 56 seconds It it is about 2,000 cr and it is supposed to be a strategic kind of say kitty that we are building so that it is 50:04 50 minutes, 4 seconds not that say suppose it is crossing say 3,000 we'll start withdrawing it is a kind of say long-term strengthening of the balance sheet and our capital 50:12 50 minutes, 12 seconds position in a way so we will continue to build and will not withdraw unless there is a say major catastrophe which puts 50:20 50 minutes, 20 seconds stress so we have a internally a kind of a policy for this creation and utilization of the cat 50:28 50 minutes, 28 seconds reserve and we will be continuously recalibrating that because uh any withdrawal from cat reserve is also a substitute from the say reinsurance 50:37 50 minutes, 37 seconds purchase and all that. So there is a trade-off involved. So on a dynamically basis we'll be evaluating this and uh we 50:45 50 minutes, 45 seconds will be take uh undertaking a major review when we touch something like 5,000 crores. So it is a long journey. 50:54 50 minutes, 54 seconds I hope it helps. 50:56 50 minutes, 56 seconds No sir, it helps a lot. So just one uh sorry I I I missed one point when you were mentioning what how how does the 51:02 51 minutes, 2 seconds utilization of this work like we will see if say there is a major uh 51:10 51 minutes, 10 seconds jolt to our P&L a major catastrophe uh in line with the this particular say 51:16 51 minutes, 16 seconds catastrophe reserve policy with the with the approval from the board we can utilize the funds in the cat reserve 51:24 51 minutes, 24 seconds that is how we are planning Sure sir that that's very helpful. Thank you so much. I'm done. 51:34 51 minutes, 34 seconds Thank you. Participants who wish to ask a question may press star and one on the touchstone telephone. 51:48 51 minutes, 48 seconds As there are no further questions from the participants, I now hand the conference over to the management for the closing comments. 51:56 51 minutes, 56 seconds Thank you. As we have been uh advising the investing community over all these quarters quarters earning earnings calls 52:05 52 minutes, 5 seconds that market is becoming uh more nuanced, it is becoming more sophisticated. It is evolving. 52:12 52 minutes, 12 seconds uh as I also mentioned in my introductory remarks that though this market is getting characterized as a 52:19 52 minutes, 19 seconds soft market uh every soft cycle phase is also different though there are similarities there are also differences 52:26 52 minutes, 26 seconds uh there is there is more nuanced approach in terms of assessing a particular student's uh uh operating 52:34 52 minutes, 34 seconds performance on the back of discipline underwriting consistent execution and our strategic strategic approach we hope and believe that we'll continue to 52:42 52 minutes, 42 seconds achieve the guidance we are giving and continue to perform to the satisfaction of our stakeholders. 52:50 52 minutes, 50 seconds Thank you. Good morning and all the best. 52:53 52 minutes, 53 seconds Thank you sir. On behalf of General Insurance Corporation of India, that concludes this conference. Thank you for 53:00 53 minutes joining us. 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