State-run reinsurer General Insurance Corporation of India (GIC Re) Thursday posted a 20 per cent decline in net profit at Rs 603.37 crore for the March quarter due to higher provisioning related to tax and exposure towards IL&FS.
It had reported a profit after tax of Rs 751.60 crore in the same period last year.
The reinsurer has an exposure of Rs 788 crore in various debt instruments of debt-ridden IL&FS Transportation Network (ITNL) and IL&FS Financial Services (IFIN).
"The drop in profit was due to additional provisioning of Rs 359 crore made for exposure to IL&FS Group and Rs 800 crore for higher taxation on profit on sale of investments," its Chairman and Managing Director, Alice G Vaidyan, told reporters.
In the third quarter, the reinsurer had made provision of Rs 79 crore towards the IL&FS Group.
The taxation law for profit on sale of investments for non-life insurers was changed in FY18, and the reinsurer had to provide Rs 800 crore towards it in the fourth quarter of FY19, she said.
For the full year, profit after tax also declined to Rs 2,224.3 crore compared to Rs 3,233.58 crore in FY18 due to increase in tax provisioning on account of change in law.
Gross premium also declined 5 per cent to Rs 8,089.35 crore in the quarter as against Rs 8,525.02 crore in the same quarter last year.
Net premium decreased to Rs 5,774.78 crore from Rs 7,280.02 crore in the same period last year.
It reported an underwriting profit of Rs 101.6 crore as against a loss of Rs 1,170 crore in the year-ago period.
Investment income decreased 10.16 per cent to Rs 1,599 crore from Rs 1,780 crore last year.
In FY19, the reinsurer's investment portfolio, in terms of book value, stood at Rs 53,000 crore.
The reinsurer's international operations contributed 30 per cent to its total business.
GIC Re group includes subsidiary companies GIC Re South Africa, GIC Re Corporate Member, London and three associate companies -- GIC Re Bhutan, India International Insurance Pte Ltd, Singapore and Agriculture Insurance Corporation of India.
The reinsurer is in the process of converting its representative office in Moscow into a subsidiary. It is also expanding in Brazil and has applied for a limited licence.
The company's scrip ended 0.07 up at Rs 226.40 apiece on BSE Thursday.
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