The Finance Ministry has intensified pressure on public sector insurers to focus on profitable business lines, with Department of Financial Services Secretary Sanjay Lohiya specifically asking public sector general insurance companies to strengthen their focus on profitable lines of business and adopt suitable measures to bring down the incurred claim ratio. During a performance review meeting held on Wednesday, Lohiya emphasized the need for greater use of technology and accelerated digitalisation while optimising expenditure on information technology and other digital initiatives. The secretary also advised companies to improve insurance penetration and density while reducing protection gaps, with performance monitoring to be strengthened through a standardised KPI framework. According to the ministry statement, the KPIs should enable consistent and comparable assessment of financial, as well as non-financial performance across companies and should be reviewed on a quarterly basis. The meeting was attended by CMDs Rajeshwari Singh Muni of National Insurance Company Ltd., Bhupesh S. Rahul of United India Insurance Company Ltd., Sanjay Joshi of The Oriental Insurance Company Ltd., and Lavanya R. Mundayur of Agriculture Insurance Company of India Ltd.
General Insurance Corporation of India (GIC Re) has identified the influx of new reinsurance players into GIFT City as a significant challenge for the industry, according to the company's maiden annual report released on Monday. In his first annual report address as chairman and managing director, Hitesh Joshi outlined a cautiously optimistic outlook while emphasizing that the operating environment will require careful navigation and risk discipline. The company's domestic business remains its mainstay, contributing around 75% of its ₹44,006.74 crore gross premium income in FY26, though this segment has come under pressure on profitability.
GIC Re's domestic combined ratio, a key financial metric used to assess underwriting profitability, rose to 107% in the June quarter, up from 102% in FY26, as reported by the company. A figure above 100 indicates the reinsurer paid out more than it earned in premiums on that book. On a consolidated basis, the combined ratio for FY26 was 106.02%, compared with 108.81% in FY25. The share of obligatory cessions, business that general insurers are required to pass on to GIC Re, also fell to 33% of the domestic book in the quarter from 42% in FY26, as the reinsurer seeks to increase its non-obligatory business.
Despite operational challenges, GIC Re maintains a robust financial position with a solvency ratio of 4.21 at the end of FY26, significantly above the regulatory requirement of 1.5. According to the annual report, this higher solvency level should be viewed in the context of the reinsurer's efforts to regain its A- rating, reclaim lost international business and expand its global footprint. Joshi previously stated that reinsurance operates in an integrated global market where pricing tends to correct itself over time, with competitive strength ultimately depending on capital available within the regulated entity rather than promoter financial strength.
For now, Joshi's message emphasizes measured expansion with GIC Re focusing on underwriting discipline, capital strength and portfolio quality while selectively pursuing international opportunities. According to Mint reports, the company has reset its international growth ambitions after its overseas business shrank, with management now working towards a 60-40 domestic-international premium mix in the medium term, down from its long-standing goal of equal domestic-international premium mix. The company is also preparing for Indian Accounting Standards implementation and risk-based capital regime while keeping capital available for opportunities arising from India's still-low insurance penetration.
