` Q2FY24 was one of the most challenging quarters for the company in recent times. The company suffered catastrophic losses on account of floods amounting to net of Rs 301 crore during the quarter. While a confluence of multiple events affected the results for the quarter, Motor and Health portfolio registered growth. The profitability of these lines should improve going forward. Agency channel has also started growing at a healthy pace. The company expects to deliver improved results in the ensuing quarters,” said Neerja Kapur, CMD, NIA
For the half year ending in September 30, the company has recorded a net profit of over Rs 70 crore
Mumbai:
Losses out of the recent catastrophic events in India and overseas markets along with other adverse developments have pushed New India Assurance(NIA), the country’s largest non-life multinational, into red during Q2 FY 24.
NIA has recorded a loss of Rs 192 crore in the second quarter of the current fiscal in comparison with a net profit of Rs 41 crore in the year-ago period.
However, for the half year ending in September 30, the company has recorded a net profit of over Rs 70 crore.
NIA has a gross premium of Rs 9,490 crore, up 6 per cent year-on-year, in Q2FY24.
Commenting on the results, Neerja Kapur, CMD, NIA said, “Q2FY24 was one of the most challenging quarters for the company in recent times. The company suffered catastrophic losses on account of floods amounting to net of Rs 301 crore during the quarter.”
Apart from an adverse development in the aviation portfolio of about Rs 50 crore, the foreign operations of the company were also under pressure as they reported losses of about Rs 71 crore during the quarter driven by risk losses in Dubai operations and catastrophic losses in UK operations, added Kapur.
“While a confluence of multiple events affected the results for the quarter, Motor and Health portfolio registered growth. The profitability of these lines should improve going forward. Agency channel has also started growing at a healthy pace.The company expects to deliver improved results in the ensuing quarters,” said Kapur.
Industry analysts point out that series of catastrophic events in different parts of India including Gujarat, Himachal Pradesh, Uttarakhand and Sikkim, even affecting some major projects in those regions,, in the last couple of months have generated a great deal of claims which may be the largest in the country’s insurance history. All these events would pressurise the balance sheets of the general insurance companies.
NIA’s underwriting losses have risen to Rs 2,443 crore in the Q2FY24 as against an underwriting losses of Rs 1,499 crore in the year-ago period.
The combined ratio of the company touched 130.57 per cent in Q2FY24 as against 121 per cent in the year-ago period while the solvency ratio of the company has remained almost steady at 170.
The insurer’s two portfolios – Marine and Liability- have remained profitable during the reporting quarter.
According to the company, the next wage revision of employees of Public Sector General Insurance companies is due from August 2022 and will be in the form of a variable pay based on the performance of the company and the employee.
NIA has already made an ad-hoc provision towards wage revision during the quarter and period ended September 30, 2023 respectively pending finalisation of the wage negotiation.
NIA’s share price has gone up by 1.15 per cent to settle at Rs 144.85 in BSE on Wednesday
New India has a lot of scope for improvement in its performance provided claim settlement should be fast and correct information of product is given to customers.
Thanks.
Lack of knowledge and self interest of the officer in charge is one of the main reason for huge loss. The claim amount exceeding Rs.1 core,those claim file need to be examined by expert team of H.O for the improvement of the company.
Worrisome performance !
Very good company
Really worried about the future. Claim settlement needs improvement. Since we have more operating offices, every office should have at least one officer to attend claims
Improvement with positive attitude in claim settlement must be accompanied by growth in premium in every segment.
Are the cat losses mentioned net of reinsurance recovery ?