New India Assurance records a net profit of Rs 605 cr in 2018-19
``While the FY 19 numbers have been below par, the company continues its focus on reducing the loss ratio and combined ratio and deliver better results going forward," said Sahai
With a global gross written premium of Rs 28,017 crore. state-owned general insurer New India Assurance(NIA), on Monday, reported a net profit of Rs 604.77 crore in FY 2018-19 as against Rs 2,189.22 crore in the previous fiscal.
However, the largest Indian general insurer had a loss of Rs 270.52 crore in the fourth quarter of fiscal ended March 31. There was a net profit of Rs 335.96 crore in the similar January-March period of 2017-18.
On the domestic front, the company was impacted by adverse performance of the crop line of business where poor climatic conditions led to claim estimates being revised higher coupled with refund of some premium due to area correction factor computation. Underwriting losses from this line of business was Rs 210 cr in 2018-19, he explained.
Commenting on the results, Atul Sahai, CMD, NIA said that FY19 has been a challenging year for the company with multiple CAT(catastrophic) events affecting both the Indian and foreign operations. The overall impact of these events was roughly about Rs 740 crore .
``While the FY 19 numbers have been below par,the company continues its focus on reducing the loss ratio and combined ratio and deliver better results going forward," he said.
The motor line of business of the company continues to witness severe competition with loss ratio on the motor OD segment significantly higher than last financial year, he said..
Total income of the company in the reporting year went up to Rs 25,406.19 crore from Rs 23,365.03 crore while total income in the March quarter rose to Rs 6,570.11 crore from Rs 6,060.47 crore in same period a year ago, the company said in a regulatory filing.
The Board of Directors have proposed dividend of 30 per cent pe share subject to the approval of the members at the Annual General Meeting.
NIA’s Combined Ratio during the reporting year was 123.58 per cent and adjusted combined ratio 106.47 per cent during the period.
The company had a solvency margin of 2.13x and a net worth including fair value change of Rs.38,022 crores in 2018-19..
NIA's investment assets at market value is pegged at Rs.69074 crores in 2018-19..
Describing the results of the company as not encouraging,in a message to the company's employees, Sahai said ``the present scenario in market is extremely challenging and we have to put in more efforts to increase the market share and improve the profitability.’’
The company, during the year, aligned the method of computation of Unexpired risk reserve (URR) for foreign business with that of the Indian business which led to a further hit of about Rs 175 crore.The investment income was impacted by about 116 crore due to write off/provisions made during the year, he said..
`On account of change in actuarial assumptions, the provision for retirement benefits for the company was significantly higher than the previous year. The results were further affected by the provisions made by the Pension & Gratuity Funds against their exposure to certain debentures, added Sahai..