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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, good day and welcome to the General Insurance Corporation of India earnings conference call. [Operator Instructions]
Please note that this conference is being recorded.
I now hand the conference over to Mr. Binay Sarda from Ernst & Young. Thank you and over to you, sir.
Thanks, Vinil. Good afternoon to all the participants on the call and thanks for joining this Q4 FY 2022 Earnings Call for General Insurance Corporation of India. Please note that we have mailed out the press release to everyone, and you can also see the results on our website as well as it has been uploaded on the stock exchanges. In case you have not received the same, please write to us, and we'll be happy to send the same over to you.
Before we proceed with the call, let me remind you that the discussion may contain forward-looking statements, which may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our businesses that would cause future results, performance or achievement to differ significantly from what is expressed or implied by such forward-looking statements.
To take us through the results of this quarter and answer our queries, we have with us the management of GIC represented by Mr. Devesh Srivastava, Chairman and Managing Director, and top members of the management. We'll be starting the call with a brief overview of the quarter gone past, and then we'll begin with the Q&A session.
With that said, I'll now hand over the call to Mr. Devesh Srivastava, sir. Over to you, sir.
Thank you. Thank you, Mr. Sarda. Good afternoon, everyone. I'm pleased to announce the financial performance for the quarter and full year ended March 31, 2022.
We are pleased to have turned profitable when it comes to underwriting performance during the quarter on the back of our ongoing focus on reducing claims ratio and bringing down the combined ratio. We continue to be selective with the sole focus on underwriting profitability.
Let me now take you through some of the key highlights of the financial performance.
The gross premium income of the company was INR 10,303 crores for Q4 FY '22 as compared to INR 8,812 crores for the Q4 FY '21. The investment income stood at INR 2,826 crores for Q4 FY '22 as compared to INR 2,286 crores in Q4 FY '21. Incurred claims ratio decreased to 50% in Q4 FY '22 as compared to 82% in Q4 FY '21. Combined ratio in Q4 FY '22 decreased to 74.3% versus 103.47% for Q4 FY '21. The adjusted combined ratio, by taking into consideration the policyholders' investment income, works out to 93.11% for FY '22 as compared to 95.85% in FY '21.
The company recorded profit before tax of INR 3,614 crores in Q4 FY '22 as against profit before tax of INR 2,045 crores in Q4 FY '21 and profit after tax of INR 1,795 crores in Q4 FY '22 as against profit after tax of INR 1,260 crores in Q4 FY '21.
Solvency ratio stood at 1.96 as on 31/3/2022 as compared to 1.74 as on 31/3/2021.
Net worth of the company, without fair value change account, stood at INR 24,439 crores as on 31/3/2022 as against INR 22,452 crores as on 31/3/2021. Net worth of the company, including fair value change account, stood at INR 55,657 crores on 31/3/2022 as against INR 49,643 as on 31/3/2021.
On the premium breakup, domestic premium for full year FY '22 is INR 28,018 crores, and the international is INR 15,189 crores. The percentage split is domestic 65% and international 35%. So there is a degrowth in the domestic premium by around 7%, while the international book has decreased by 11%. We expect the positive momentum in terms of performance to continue along with sustained improvement in underwriting performance.
Having given the highlights, now we will open the floor for questions from the interested parties. Thank you.
[Operator Instructions] We have the first question from the line of [ Anil Agarwal ] from [ AAA Investments ].
First, I had a couple of questions on the Q4 numbers. So could you explain this INR 1,500-odd crores adjustment that we've made in other income? I understand it's some mark-to-market in the equity portfolio, but could you give us some more color on this?
Yes, sure, Mr. [ Agarwal ]. I will request our CFO ma'am, Mr. (sic) [ Ms. ] Jayashree Ranade, to explain it to you in great detail.
This is a provision which we have made in this year relating to equity investments. All those equity shares which we were holding for more than 3 years. And we find that these investments, which we are holding at a book value of X particular amount, is not showing any increase in the price, but consistently at every year-end, the price has gone down for these investments. We have made a provision in the books of accounts. This amount is approximately INR 1,508 crores, which we have taken it into the P&L account this year. Is it...
Yes. So ma'am, that's like a onetime hit that we have taken, right, I'm assuming?
This is onetime, the first time. We can see going forward in every quarter there'll be an adjustment to this provision, something like a reserve for doubtful debt. This provision will keep on increasing marginally or decreasing marginally with a change in the quantum of it, where we evaluate all those equities which we hold for more than 3 years and the price movement for the 3 consecutive balance sheet date -- 3 years next consecutive balance sheet dates.
So this INR 1,500 crores, ma'am, is the difference between the book value or the price at which we bought and the current market price, right, approximately?
Exactly. This amount, we used to record it under our fair value change account until the last quarter. 31st December also, we made this adjustment in our fair value change account. So investments which we declare is always at market value, so this is kind of a depreciation which we were recording under fair value. Now we have taken it into the profit and loss.
Got it. And going forward, I mean, my sense would be that this would not be anything major going ahead, right, just whatever up and down to the extent that the market prices change?
Correct. That will be a marginal change up and down. And then accordingly, it will change supposing something goes up. If you go out of this -- in light of this particular provision, something goes down or additionally required to provide for, we will provide.
Okay. Understood. Okay, Second question, ma'am, was on the commission adjustment of INR 1,240 crores. So could you explain that as well?
Yes. This commission is on account of our -- one of the ART, which we call it a structured solution arrangement. In this structured solution arrangement, we create an account called Funds Withheld Experience Account, which means the amount actually pertains to the reinsurer. A premium has to be given to the reinsurer, of which a particular percentage is set aside into this Fund Withheld Experience Account.
So once the contract gets over and the profitability of that entire contract is affected, whatever is to be removed from that Funds Withheld Experience Account. Some -- it is accumulated into that account. From there, whatever has to be removed in the form of outstanding losses or any other deductions is removed. The balance amount is taken or given back by the reinsurers to the ceding company, that is GIC, as profit commission. The concept, I think, is clear.
So this commission came back to GIC after concurrence from all the reinsurers on the structured solution completion of the contract. So this is a...
So there is a one-off gain of INR 1,240 crores you are seeing in this quarter?
Correct, correct. This is one-off, the gains, yes. It would...
Okay. So this will not recur going ahead. So net in the underwriting profit, INR 1,200 crores is a one-off. Is that the right way to think about it?
Yes, it is underwriting loss this year. But yes, you are right, one-off -- the contra amount is INR 1,241 crores, which is reduced from the commission outlook. Net commission is -- whatever we are showing is including this income of INR 1,241 crores.
Correct, ma'am. So it is basically a profit for [indiscernible] of the commission that you had released?
Yes, you're right. You're right.
Okay, understood. And ma'am, why are the employee expenses higher in Q4 materially versus the previous quarters? Any one-offs over here?
Mr. [ Agarwal ], this is largely for -- we're expecting a wage revision. So we have provided a small amount for that. But the expenses, as you would see, are pretty minimal when you compare us to any other reinsurer.
Right now, my sense is -- is this run rate now the new run rate that we should consider? Or how do you look at it for next year?
So what -- the new what, Mr. [ Agarwal ]?
Is this -- is the employee expenses that we've incurred in Q4 going to be the new run rate going ahead?
No, no. And see, this is because the wage revision is due. And then when you have a wage revision, typically you also end up paying some arrears for the previous -- earlier 5 years.
Right.
So this is that.
What, I mean, are quantum of the arrears? If you can say, sir?
I think it's about INR 73 crores or INR 74 crores, around that. So we could have a ballpark INR 75 crores.
INR 75 crores? Okay. Yes, perfect. Right. I mean -- okay, sir, if there are no further questions in the queue, I'll continue. Else, I'll come back in the Q4 for my follow-up questions.
Mr. [ Agarwal ], you can continue.
Yes. okay. The next question, sir, was on the combined ratio. I mean I appreciate that we've been taking a lot of steps over the past few quarters to get this in control, but the international book has obviously not been supportive. So why are we still targeting that 60-40 in terms of domestic-international when domestic ex COVID seems to have come in below 100% on a combined ratio basis?
See, Mr. [ Agarwal ], one of the basic tenets of reinsurance is spread.
Right.
You write only one territory. For example, India. Now in India, as you know, we have a right of first refusal. By that logic, we can write pretty much 100% of the Indian market.
Why is it that we are not doing the Indian market 100%? For the same reason that you as a reinsurer, you have to have spread. If you don't have spread, then your portfolio becomes extremely volatile. And a reinsurer is not worth his salt if his portfolio is volatile. That's how you want to spread your business across the globe as much as possible.
Today, we are dealing with over 160 countries. Now that is not a bad bet when you consider a total number of 195-odd countries. That's a good bet. So we want to continue our dominance in the Indian market. That's why we have a long-term strategy of 50-50.
But it's also important to have an equal amount of spread so that we have losses from one area being offset by the premiums from the other. So that is something that is typical of the trade of reinsurer. If you take that away, you make it volatile. That's what you end up with.
No, I understand that tenet, sir. But the point is that international fire is a portfolio that we've really been struggling with for a long time, right? I mean I've been following GIC for the last 4, 5 years, and since I can remember, we've been struggling with this portfolio. So is there something that structurally needs to be changed, the pricing materially need to go up for us to make money? How are you thinking about that?
See, Mr. [ Agarwal ], if you also notice, over a longer period of time of, let's say, 2 decades or sorts, this is the first time that the market has hardened. The reinsurance market is hardened for the simple reason that there had been so many catastrophic losses. That capacity has shrunk.
So there have been losses. But now we are getting much better rates for the same amount of risk that we assume on our books, which is a good bet. So this hard market condition is expected to continue for a couple of years at least because of capital having been trapped in these losses. Therefore, that capital is now not available. There's a typical demand-supply curve that's operating.
Because of that, it's a good time to be in the foreign book. In any case, you -- having paid losses, you'll really want to come out at a time when you are in a position to recoup them.
So how much price hardening have been seen in the -- your renewals for the international book separately and domestic separately?
International renews largely on the 1st of January. Domestic is the one that renews on the 1st of April. So there have been price corrections in both. I request Mr. Hitesh Joshi, who looks after our reinsurance portfolio, to step in here, please.
Pricing trends tend to be geography based and class based, but we can probably put the hardening in the high single digit and low double digit, something like, say, 5% to 15%. Of course, there are exceptions where there are, say, loss-making accounts, where the price reloading can be much higher. But that is where we would like to peg the hardening of the price.
With this, you are saying for domestic or international?
Oh, I'm talking about the international...
The international.
The 1st January.
So weighted average for our portfolio, sir, would be close to 10%. Is that fair?
Yes, that could be a correct conclusion.
Okay. And domestic, sir?
Domestic, as far as fire is concerned, maybe you can put at a mid-single digit, maybe something like 5%. We did a price correction in other classes like marine, motor and liability. That is where we did quite a bit of price correction. It will depend on individual account as to how much price correction was appropriate. So again...
The average would be how much, sir?
Average could be easily around 10%.
Okay. 10% from 20%.
But again, there is a difference between, say, proportional and nonproportional. I'm essentially talking about nonproportional.
Correct.
Proportional is, again, all together a different piece.
Understood. So this -- all of this, so what -- do we expect the combined ratio going forward to be -- I mean, I understand too many moving parts and variables, but still what is our sense of FY '23 combined ratio?
See, Mr. [ Agarwal ], for a reinsurers, the trends are more indicative than anything else. Now you see our trend. We have been trying to make it a much healthier portfolio than before. And that trend line is very evident to us now, which is an indication that we are on the right path. So to give a number possibly is an impossibility. You can't. You really can't predict it. But yes, going on the trend, we should be doing much better in '23 than what we did in '22.
Understood. And do we have any exposure in Russia, Ukraine or the parts of Europe that are suffering right now? Any expected losses over there?
Yes. See, exposure is definitely there because there are territories that we do, right? But Ukraine, the exposures are not much. So Ukraine, I think the total is less than $1 million of premium.
Okay.
Similarly, if you look at Russia also, the total from Russia was around $15 million. But after the erosion there, it's now closer to $10 million, $11 million.
Understood.
So they're a small part of our entire operations.
Got it. So -- and in Q1 until now in the first 2 months, any major losses that we've seen in terms of Nat Cats or otherwise?
No. No, Mr. [ Agarwal ], we haven't. We haven't. I mean only what I can think of right now is that Nepal crash, where we have a small 10% share, but that's...
Small.
Still, that's very small. But no, as far as the cat goes, we haven't heard of any cat.
Understood. That's good deal. Also, one more point on the tax rates. I mean they seem abnormally high. If you could explain why we are seeing such a high tax rate.
Actually, we -- GIC has got some MAT credits in the books. If you have seen, INR 814 crores is there last year. So we have still not opted for the reduced tax rate until we complete -- we will finish our tax MAT credit into that. I think next year onwards, we will opt for the reduced tax rate.
FY '24 you mean?
No, '23. '23?
Yes. Yes.
Okay. So this year itself, FY '23 should be...
No, no.
Reduced?
Yes. Yes.
Okay. And so what is the tax rate guidance that we can take for FY '23, ma'am?
22% as...
22% plus all those additional.
Understood, ma'am. So around 25% because this year, on the PBT, it was closer to 40%, 45%, right?
Yes, because certain income -- or certain expenses are kind of additional allowances, et cetera.
Correct.
So that is why last year can be like that. But going forward, it would be around -- after 22% of tax rate, it will be much lesser, nearly what we are showing now supposing a similar re PBT comes.
Right.
It will be nearly 8% to 10%, whichever, MAT presently.
Okay, ma'am. So assuming that we make a PBT of, say, INR 3,500 crores, you are saying instead of the INR 1,550 crores tax, it will be 10% lower in terms of the amount? Or more than that?
Yes. The reason being it is INR 1,800 crores is our tax. And then there is a INR 200 crores credit due to previous year's provision. This is what the breakup of that tax is. Okay. So INR 1,800 crores basically will come down to roughly what?
1/3 will go down, basically. So 22% will be the rates plus surcharge, whatever surcharge will be there. So that will be payable next year onwards, -- currently and onwards, basically.
So correct. So then on INR 3,500 crores of PBT, that translates to close to only INR 900 crores of tax payout, right, if my math is correct? Plus...
Yes. Even during this year, if you see the balance rate, there is INR 800 crores MAT credit was there. So we will not be paying this all INR 1,800 crores.
Correct.
We will be making payments of only INR 1,000 crores. So that INR 800 crore is -- so that is the total tax payments. And now it's -- MAT balance is zero for current year, I'll say.
Understood. My final few questions on the investment portfolio. So given the current interest rate scenario that interest rates are going up globally, how have we positioned our debt portfolio, one? And do we expect any mark-to-market return to that portfolio?
I will -- to your second question, whether we will be doing mark-to-market for debt, no, our accounting policy does not allow that.
Only HTM, ma'am?
Only HTM. So that is ruled out.
About the debt investments, mostly iIRDAI guidelines give us a broad road map how should we invest, correct.
Right.
And that means we have to have a minimum 30% in government securities and 15% housing and infra. So these are our guidelines where -- how we invest. So those will continue.
Going forward, our corporation will definitely think of -- more in the government securities because interest rates are increased there. The yields are increasing in government securities. So that -- of course, the allocation will be marginally more. And we are always secured kind of investors on AAA. That rating parameter remains so.
So the picture will be slightly skewed towards government securities next year -- till next year, kind of 2% to 3% more or less, say 5% more allocation to government securities.
Understood, ma'am. And what would be the modified duration of the portfolio broadly, the debt portfolio?
It is in the range of 5 to 6 years, I suppose, yes. 5, 6 years.
5 to 6 years?
Yes, if I did it...
Got it. Okay. And ma'am, how -- the investment book breakup that you've shared between policyholders and shareholders, so could you explain how this is done? Like is there some ratio that we have tied or that we are accounting for that?
Actually, yes, you're right, it is always a ratio which we apply to our total investment book. Investments per se are done at a total level. As per our accounting policy, we work out the policyholders' fund, which includes our IBNR, the unexpired risk reserve and the premium deficiency; and also shareholder funds with the share capital and free reserves.
So this ratio in the current year is at -- it is approximately 75% to 25%. So our investment book is like shareholders' funds and policyholders' funds is based on this bifurcation. Exception is, of course, foreign investments, which we take it to our shareholders' fund. These are few exceptions which are small numbers, actually.
Got it. So broadly, 75%-25% is your split?
Correct. Correct.
Okay. And any equity allocation increase or decrease viewpoints given what is happening in the markets currently?
We try to like limit our equity investments up to 20% or less than 20% of the total investment. That is our first fundamental treatment.
Right.
Now amongst that, whenever market goes down substantially or with our parametric indications, we take the advantage of market going down to buy good blue chip, [indiscernible] stocks. When the market goes up, of course we realize the profit out of those. So based on the market movement, we -- purchases and sales are done.
Yes, this year, since the market was down in the fourth quarter, we made good purchases. And through third quarter, there was a kind of a small purchase. But still our equity is less than 20% even this year. It's about 18% now.
18% allocation currently, okay. So with all of this, ma'am, what do you expect the investment income to kind of look like? I mean are we going to be able to retain this investment income that we've been generating or that we have generated last year? Or do you see any risk over there?
Interest income definitely will be persistently -- we will definitely be able to make it because our investment strategies are like that.
And in terms of profit on sale of investment, it depends on the market condition. But we will definitely try to endeavor it to be at this level, if not a little more, marginally more than this.
Got it. So my final question is on the alternate capital, which had like really driven down the reinsurance prices, always presenting a hardening since quite some time. So given all the challenges in the market, are we seeing that alternate capital as suddenly moving out of this space?
I think it is -- most of the capital is kind of locked because of the earlier events, and there was the kind of reassessment from the -- these capital deployers. At the same time, this inflation and hardening of rates will be a disincentive for them to deploy this side. But again, given the vast pool, the impact may not be so very significant. I think it is something to watch out for.
[Operator Instructions] The next question is from the line of Avinash Singh from Emkay Global.
A couple of questions. First, on -- particularly on the life reinsurance side, I mean the overall scheme of things, you have been relatively a guarded player in the life insurance market and particularly a large part of life insurance exposure agreements in India. But in that context, the timing of growth particularly in the last 2 years, perhaps what I would say mistimed. And that, of course, reflects in your life underwriting level. Now what kind of pricing changes you have -- pricing or term changes you have seen in the life insurance for the renewals happening now to your [indiscernible]? So that's the first question.
And second is more to again do with a bit of quarterly numbers. So the INR 1,241 crores profit commissions, that is going into your P&C? I mean if -- am I right if I say that for the 50% P&Cs for the quarter, if I were to adjust for this INR 1,241 crores, I mean, broadly it will take us to 64%? I mean -- so that's my question. That -- is my understanding correct? And even if that -- and 64% kind of a P&C ratio looks too low, I mean for a business with a diversified portfolio, that to -- with a kind of support out there and kind of profit gain. So what has gone -- or so what's into your favor to bring down the P&Cs for this quarter? I mean are you satisfied with your earnings? So two questions. So first on the life reinsurance and the second one on this -- P&Cs for this quarter.
Thank you, Mr. Singh. Mr. Singh, I'll first take the life question of yours first.
So see, life portfolio for a reinsurer brings in stability and the diversification that it speaks. Now in our case, our life portfolio is still very small, just about 2%, 3% of our total book. Yes, because of COVID, there have been heavy losses in -- reported in the life portfolio that also, again, then led to a price correction as well. So the payback that we are expecting in the life portfolio would be about 2, 3 years. So in any case, the growth is always cautious and never very swift, so to say.
So we will grow that book over a period of time and cautiously and that -- and making sure that we get a risk-return that is -- I mean, a price-risk return which is good and satisfies our appetite. So that is the strategy for life going forward.
Now about the other two parts that you asked about, first is about that -- you asked on amount -- the profit commission. So I'll request Jayashree, ma'am, to comment there. And then for the losses, I'll just request our Appointed Actuary to just put in a few words there.
Yes. Profit commission is actually out of the funds which we withhold on behalf of the reinsurer, as I said in the earlier question also. Out of the reinsurance premium, we have a contract called structured solutions wherein reinsurers are protecting us up to a particular level and after a particular level, et cetera. So some proportion of the premium is retained into this account, the funds withheld, actually. From there, when the contract gets over or completed, then all the outstanding losses are reduced. The final balance is arrived at. And this final balance is considered as profit commission in the accounts for the year. Now this account -- profit commission is netted out from the net commission which we see in the final balance sheet. So this is where it is. It is INR 1,241 crores, which is a onetime kind of an adjustment to the account.
So ma'am, this is adjusted in commission or claims? Because if it is adjusted in commissions then, I mean -- because, I mean, the commission cost actually is pretty normal for this quarter. So that is why I was getting a bit confused. That's okay, I mean, because the commission cost is like around INR 2,000 crores. So that roughly translates to close to 19.5% even after this one. So that's what I wanted to know, okay, is your net -- this profit commission of INR 1,241 adjusted from the commission cost or it's going into the -- or your claims cost?
Yes. Actually, this profit commission was adjusted in our third quarter. If you see our third quarter result this was adjusted in the third quarter.
Okay. Okay.
Yes.
Okay, it's very clear.
Right.
And -- yes. So now coming to the top 50% in solution, that looks -- I mean, I know, I mean, in reinsurance, it's more a number that could be looked rather a quarter. But yet, I mean, for technical [indiscernible] this, I mean, looks exorbitantly low. So, I mean, is it giving some impression that either the Q3 IBNR reserves were too prudent or there is some kind of a [ material event ] going into Q4. So can you just help us understand that -- what is sort of -- or which lines have led to this kind of a strong reduction in claims ratio? And, I mean from where can you sort of release the reserves or reduce the IBNR?
Yes. See, I'm Sateesh, Appointed Actuary. See, when you see this quarter-wise loss ratios for a general -- sorry, sorry, reinsurance company, you have to understand that the dynamics are slightly different. See, what happens for a direct insurance company is that they keep on getting their premiums every day as well as they keep on getting their claims every day. So it is more of a smoother transition from one quarter to another quarter. But in case of a reinsurer, what happens is that our quarterly statements, we call it a statement of account, SOA, those arrive on a quarterly basis, that, too, with a 1-quarter delay.
So what happens is any -- if you see the GIC's loss ratios for the last maybe 5 or 6 or 10 years or so, it would have remained in the range somewhere around -- this would have hovered around 90%. And even if you see the last year's loss ratio, that is 92 point something, which has come to about 93 point something for this quarter. That would have remained there.
But quarter-wise, if you see, those will definitely vary because -- based on the booking. It's not because we are releasing IBNR or we are adding IBNR. This is because basically, what happens is that we estimate the claims, and the claims arrived at a later time, maybe slightly different from what the estimation has done. So if you see that December loss ratio, along with the 50% that you see here for the quarter ended December 31, 2021, was 121%, so that means that is the dynamics of the business. So if you take the average of these 2, that will come to about 80, 80-odd percentage also.
So it is -- so what -- a point to be noted is that for a reinsurance company like GIC, the quarterly -- there is going to be -- there will be volatility. There was loss volatility and there will be volatility because of -- based on the receipt of the statement of accounts as well as booking of these numbers into our system.
Then to your question -- specific question on which classes of businesses contributed, see, agriculture for the underwriting year 2021 was good, something we got after almost 4 years or so. We have been incurring losses on the PMFBY or the agriculture portfolio. This has been better for this year. Similarly, our fire portfolio has been consistently performing well. Domestic fire has been consistently performing well.
Only like -- only portfolio that is giving us loss is the foreign fire. That's also not because of the business that we write and because of the catastrophic claims that we happen to see, and those have considerably increased over the last 3, 4 years.
So what I would say is that the numbers are comparable if you just take it on a yearly basis, but the numbers are likely to be volatile if you take it on a quarterly. I hope I have answered your questions.
Yes. So now, again, if I can ask some follow-ups. So you're right. So that's when I started saying that, okay, it's better to look at the year-on-year. Now even if I look at year-on-year, the fact we consider here is that FY '22 has been one of the most challenging years and particularly for us as a multiline reinsurer like you, where you had a lot of losses in life, of course, normal because of the COVID also on the health side. Yet you match previous year P&C, sir. There seems to be something, which is, I think, that was -- and now related to that, on crop, you say that, okay, you had a better experience. But if I am not wrong, Rabi will be booked particularly in your Q4 numbers. Now in Rabi also, towards the end of the harvest season, because of the abnormal temperature or heat, there had been meaningful loss rate particularly in the wheat. Now are you comfortable with the results that you will be holding in crop because the Rabi just gone by will be settled over coming months? So are you comfortable with your reserves particularly on the crop because, yes, crop underwriting looks abnormally too good, I mean, [indiscernible]? So that's the thing. So that's my question. Because year-over-year, you match kind of -- or rather bettered -- or capital [ efficiency ] are flat even when there was so much of losses in the health and life. And are you comfortable with your crop reserve right now? Because crop, particularly wheat, has seen a lot of yield towards the end of the quarter.
Sir, again, coming to the same point, one is that since the -- June 2020, there have been a lot of efforts that GIC had been taking to reduce the underwriting loss ratio. So that has actually -- if you see the -- if you just bifurcate these -- divide these numbers into life and non-life, the non-life numbers, because of all the efforts put in by the management, it has actually improved by about 3 to 4 percentage. But -- yes, I'm sorry, I think there was an interruption.
So -- but even though the life portfolio is quite small, that has given about 200-odd percentage of loss ratio. So whatever reduction or whatever improvement we have seen in the loss ratio in the non-life side has been, well, washed away by the life loss ratio.
So what we expect is that going forward, the life loss ratios maybe in the 3 to 4 quarters, in the next 3 to 4 quarters, we should come back to the 2020 level also. But maybe there could be another 1 or 2 percentage improvement we expect to be -- to come in the non-life loss ratio. So there should be a considerable improvement. So this is not something magic because we have been all working together to reduce the loss ratios, pruning the treaties and looking at performance of the treaties and doing a lot of effort. So those have borne fruit.
Then your next question on agri, what I told is the agri underwriting year 2021, so the year which completed on 31st March 2021, so that is almost done now. So there, we are seeing a good improvement. But we have adequate reserves kept for this 2022. The current Rabi as well as current Kharif season, we are adequately reserved. So those are yet to -- maybe -- may take another 1 year for the whole losses to run off.
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you. Thank you, everyone, for your time today afternoon. As is fairly evident, we have been working on a set strategy, and that has started to show the trend lines that we are on the right track possibly. And we will continue the strategies, trying to give a much healthier portfolio to the corporation so that we are into a long-term, sustainable business. And that is what the endeavor shall always be. Thanks again for your time in the afternoon today. Goodbye and good luck.
Thank you. On behalf of General Insurance Corporation of India, that concludes this conference. Thank you for joining us. You may now disconnect your lines.