General Insurance Corporation of India

<dhhead>Shri Ramaswamy Narayanan</dhhead>

Chairman and Managing Director

Dear Shareholders,

It gives me great pleasure in welcoming you to another successful year for GIC Re.

At the outset, I would like to thank you, for your continuous support and patronage, which has enabled your Company to progress through challenging situations. As we reflect on the past year's journey, I am filled with a sense of gratitude for the collective efforts that have brought us to this point.

The whole nation has celebrated the 78^th Independence Day with great enthusiasm and the slogan of "Viksit Bharat 2047" is resonating in the dreams of every citizen of India. While we celebrate the vision, entrepreneurial spirit and commitment of our Bravehearts and Leaders, we also take this opportunity to take the nation to greater heights. In every field – be it the economy, science and technology or Sports, we have been steadily climbing the world rankings and have shown our mettle at a global level.

The global Insurance and Reinsurance Industry is today at the crossroads. On the one hand, climate change is increasing the risks that we are taking onboard whereas the tumultuous global geopolitical crisis, marked by conflicts such as the Russia-Ukraine and the Israel-Palestine wars, has disrupted the global economic order. The global financial markets including (re)insurance are thus challenged - stability and growth are seemingly elusive as of now across different parts of the world. India has also witnessed an increased number of catastrophic events in the past year. Cyclone Michuang, Sikkim Floods, North India Floods and Cylone Biparjoy are some of the notable events affecting 2023-24.

Despite all these challenges, I am glad to announce that our company has not only weathered the storm but has also emerged stronger, more cohesive, and poised for continued success in the long run.

The Corporation is committed to support the domestic market while maintaining profitability and sustained growth. Our consolidation phase of bottom-line approach has made significant impact on our financials and now our shift is towards growing our book profitably.

The gross direct premium underwritten by non-life insurance companies in India increased by 12.8% to _ 2.90 Lakh Crore in FY 2023-24 compared to _ 2.57 Lakh Crore in FY 2022-23. Your company has booked Gross premium during Financial Year 2023-24 of _ 37,181.76 Crore. The underwriting loss for the Financial Year 2023-24 is _ 4006.56 Crore as against _ 2,341.37 Crore in the previous year. The increase in the underwriting loss was due to higher catastrophic events in the country.

Profit before Tax for the Financial Year was _ 7,877.93 Crore as against Profit before Tax of _ 7,749.44 Crore during the previous year. Your company reported a Profit after Tax of _ 6497.30 Crore for the Financial Year as against Profit after Tax of _ 6,312.50 Crore during the previous year.

I am pleased to inform that the investment performance of your company during Financial Year 2023-24 has been very encouraging. Your Company has a strong book value of Investments which grew by 11.7% to _ 96,299 Crore and the Market Value increased by 19.1% to _ 1,40,048 Crore over the previous year. Income from investment (including Profit on Sale of investments) during the year stood at _11,625.93 Crore registering a growth of 9.7% over the previous year.

Your company has taken the opportunity of every correction in the Indices by purchasing top tier fundamentally strong scrips across sectors and booked profits with every rise in Indices. The yield on average level of investments stood at 11.6% as against 12.2% of the previous year, the decline due to lower realisations on sale of securities.

Your company has a Net worth (including fair value change account) of _ 81,330 Crore and total assets _1,78,286 Crore, while the Solvency ratio increased to 3.25 as at 31.03.2024 from 2.61 as at 31.03.2023.

GIC Re continued to maintain its leadership in the domestic market which contributed 69% of the premium income for Financial Year 2023-24, with the international premium contributing 31%.

The Indian economy exhibited remarkable resilience amidst global economic uncertainties. Supported by robust policy measures and prudent regulatory frameworks, India recorded a commendable growth rate of 8.2% in FY24 driven by stable consumption demand and steadily improving investment demand.

The global reinsurance sector is expected to witness improved performance driven by substantial rate improvements, and rising investment income.

The market environment for reinsurers remains promising based on favourable property/casualty reinsurance pricing conditions, pre-pandemic earnings levels in life reinsurance, and increasing net investment income. However, the industry also faces challenges such as elevated natural disasters, increasing cost of capital, financial market volatility, and inflation risk.

Non-life premiums are projected to grow at an annual average of 8.3 per cent during 2024-28, driven by economic growth, improvement in distribution channels, government support and a favourable regulatory environment.

GIC Re is committed to IRDAI's vision of "Insurance for All by 2047", thereby steering the industry towards greater efficiency and innovation. The Bima Trinity initiative by IRDAI is seen to be a gamechanger in the field of insurance. While our focus remains primarily on profitable growth in market share, our objective is to create values for all the stakeholders.

The upcoming implementation of IFRS will streamline the processes and designs for auditing, taxation and investment techniques which will provide consistent and transparent solutions to the industry. Risk Based Capital Mechanism will also change the way risks are assessed and solvency is calculated, thus leveraging capital funds for profitability and leading to growth of the industry.

The reinsurance market outlook seems rosy and promising, buoyed by the culmination of significant price rises and stricter terms and conditions established in 2023 and during the

January 2024 renewals. The industry's unwavering commitment to prudent pricing and underwriting discipline has fostered a hard market environment, alongside the emergence of rising investment yields and heightened demand for reinsurance protection.

The Indian life insurance industry is expected to continue to grow at 11-13% over the next three to five years driven by prudent underwriting practices, rapid urbanisation trends and increasing demand for term protection plans.

The Indian non-life insurance sector is poised for a 13-15% expansion in the foreseeable future. This growth trajectory will be primarily driven by the health and motor insurance segments, supported by increasing disposable income levels and a rise across other segments. It is also expected that new areas of insurance like surety bonds, cyber and title insurance will gain traction in the industry, thus adding to the income streams of the industry as well as providing the much-needed diversification.

Strengthening distribution networks and use of Insurtech to cover the last mile will also contribute to the sector's growth. However, competition is likely to increase with the entry of new players which could lead to pressure on pricing.

GIC Re is committed to focus on its domestic presence and has expanded its share of business in the 1^st April renewals. It will focus on the international business once it is able to regain its international credit rating of A-. The Corporation has a diversified book of business which gives a lot of resilience to the company.

I would like to extend my heartfelt appreciation to our board of directors for their wise counsel and unwavering support, our management team for their leadership, and our employees for their dedication and hard work.

My special thanks to all our stakeholders for the trust you have reposed in us. You remain an invaluable pillar of strength, and I look forward to your continued support in our journey towards achieving higher levels of excellence.

Thank you