General Insurance Corporation of India on Tuesday reported a consolidated net profit of Rs 1,991.59 crore for the financial year 2020-21.
The state-owned reinsurer had posted a loss of Rs 186.46 crore in 2019-20.
On a standalone basis, it posted a profit after tax of Rs 1,920.44 crore for FY21 as against a loss of Rs 359.10 crore a year ago, according to a company statement. It said that despite the handsome performance in FY21, the pandemic has created "significant uncertainties" on the growth front.
The gross premium collected in FY2020-21 went down to Rs 47,014 crore, from Rs 51,030 crore in the previous financial year, while the net premium was also down.
The incurred claims also reduced to Rs 36,853 crore in the reporting fiscal, down from Rs 43,035 crore in the previous fiscal, the city-based company said in a statement.
Incurred claims ratio improved to 92.4 per cent as of March 31, 2021, from 97.5 per cent 12 months ago, while the underwriting loss also improved to Rs 5,488 crore from Rs 6,367 crore.
Investment income zoomed to Rs 8,820.86 crore for the year ended March 2021 as compared to the previous financial year's Rs 7,125.48 crore.
The solvency ratio improved to 1.74 as on March 31 this year, from 1.53 in the year-ago period.
Its total assets also saw a sharp rise to Rs 1,34,661.22 crore, compared with Rs 1,16,196.20 crore as of March 31, 2020.
The general insurer has not recommended any dividend for 2020-21.
Despite the healthy growth in business metrics in the COVID-19 year, the company said the pandemic has created significant uncertainties in regard to the growth trajectory.
It flagged concerns with regard to the pandemic's impact on business and economic growth and its resultant impact on premium volume, particularly from small and medium industries.
"There could be some shrinkage of purchase of insurance with a potential for cascading effect on reinsurance.
"The specialty classes of business such as event cancellation, travel, credit, surety, mortgage, agriculture, directors and officers, and business interruption are expected to get adversely affected," it said.
From an operational perspective, business could continue essentially through work from home across the globe by the insurers, intermediaries and reinsurers, the statement said.
The global economic growth is a key driver for insurance markets which feed into reinsurance sector, it said.
From an Indian perspective, the company said as the insurers get listed and market consolidates in the backdrop of declining interest rates, the pricing discipline in the market can be expected to strengthen in the medium to long term.
Shares of the company on Tuesday closed at Rs 204.20 apiece on the BSE, up by 2.85 per cent.