ANNUAL REPORT 2007-08
The total gross premium written by GIC during 2007-08 was Rs.9315.55 crore as compared to Rs.7404.17 crore in 2006- 07. The net earned premium during 2007-08 was Rs.7228.96 crore as against Rs.5263.80 crore in 2006-07 recording a growth of 37.33 per cent It may be pertinent to mention here that the financial position of the company related five quarters for 2007-08 as against four in 2006-07 which was necessitated on account of change in the accounting policy of the insurer. The underwriting results on domestic business showed a loss of Rs.927 crore in 2007-08 (Rs.116.40 crore in 2006-07). The Income from investments was Rs.2031 crore in 2007-08 as against Rs.1849 crore for 2006-07. For the year under review, profit before tax stood at Rs.1067.30 crore as against Rs.1789.46 crore in the previous year and profit after tax stood at Rs.992.78 crore as against Rs.1531.34 crore in 2006-07. The net incurred claims for all segments put together increased to Rs.6011.50 crore from Rs.3622.72 crore in 2006-07, thereby impacting the bottomline of the re-insurer.
Given the 35.17 per cent decline in net profits in 2007-08, the Corporation has recommended a higher dividend at Rs.9.60 per share to the shareholders in 2007-08 (Rs.7.20 per share in 2006-07).
IRDA directed setting up of Indian Motor Third Party Insurance Pool by all General Insurers in India to collectively service Commercial Vehicle Third Party Insurance business. This arrangement became effective from April 1, 2007. The share of GIC in the multilateral re-insurance arrangement shall be 15 per cent same as the share of statutory cessions. The balance of pooled business will be shared by all other member insurers. GIC is the Administrator of the Pool and is being
the year April 1, 2007 to March 31, 2008 and 10 in respect of insurance attaching during the year April 1, 2008 to March 31, 2009 without any limits on the sum insured or PML of cessions. All other terms for obligatory cessions remain unchanged.
The obligatory cessions received by the GIC along-with re- insurance commission and profit commissions are placed at Annex VII.
C. RESEARCH AND DEVELOPMENT DEPARTMENT
Research and Development department has guided the TAC to collect transaction level data for generating tabulations in respect of motor business. The data was cleaned and tabulations were generated at various aggregate levels so as to help theAuthority in arriving at bench marks and the insurers in arriving at technically based rates in a detariffed regime. Further, the aggregate tables have been put on the websites of the IRDA and TAC. Along with the aggregate tables on motor, tabulations in respect of health insurance based on the data collected from TPAs were also generated and placed on the websites of the IRDA and the TAC. Realizing that the existing data formats are not conducive for the analysis in a detariff regime, the data formats were revised in consultation with the underwriters and the insurers. Data formats for collecting information on other lines of general insurance business viz., fire, engineering etc. have been finalized in consultation with a group of underwriters, IT professional and actuaries. The revised formats are put on the IRDA/TAC website. It is expected that companies submit the data as per the formats.
paid a fees of 2.5
per cent plus service tax on
premium of the pooled business.
For this purpose
the total GIC has
set up a separate Motor Pool department manpower, hardware and software systems.
In pursuance of the powers conferred by section 101A of the Insurance Act, 1938, the Authority in consultation with the Re-insurance Advisory Committee constituted under section 101B of the Act and with the approval of the Central Government specified that the percentage cessions of the sum insured on each policy to be reinsured with the Indian reinsurer shall be 15 in respect of insurances attaching during
The Research and Development department in coordination with the Government of India conducted a National Seminar on Construction of Services Price Index Numbers. This seminar was purported to explain the usefulness of inclusion of insurance business in the basket of Services so that the price movements can be monitored. This Seminar has drawn the attention of the insurers on the important role of the Services sector in the economy in general and within the services sector the insurance sector in particular. Towards this end, the Department has been coordinating with the insurance companies for supply of information to the Ministry of Industry