Madhulika Bhaskar, general manager, New India Assurance, said, ” The profitability for the year was severely affected due to COVID claims, with the company settling about Rs 3760 crore worth of such claims during the year. The investment income for the quarter was lower as the market conditions were not very favourable’’
`With the COVID situation improving, we look forward to improved performance in the coming quarters.” said Bhaskar
Mumbai:
Large Covid-19 claims and low investment income have pushed New India Assurance(NIA), country’s largest general insurer, into losses in the fourth quarter ending in March 2022.
The listed general insurer, despite having a robust premium income, recorded a loss of Rs 549 crore in Q4 FY 2021-22 as compared to a net profit of Rs 239 crore in the corresponding quarter of the previous fiscal.
NIA has finalised its results for FY 2021-22 in a late evening board meeting on Monday.
For the full year- FY 2021-22, the net profit of the company has drastically dropped by almost 90 per cent y-o-y to Rs 177 crore.
The multinational general insurance has declared a dividend of 30 paisa for a share of Rs 5.
Madhulika Bhaskar, general manager, NIA,said, ” The profitability for the year was severely affected due to COVID claims, with the company settling about Rs 3760 crore worth of such claims during the year. The investment income for the quarter was lower as the market conditions were not very favourable.’’
In the fourth quarter, one-time initial provisions towards employee benefits liability on account of SVRS and sick leave totalling Rs 121 crore also negatively affected the domestic results, said Bhaskar.
The company’s foreign business, with presence in 28 countries, suffered a severe setback because of additional provisions required in the UK operations due to unprecedented inflation, and some adverse claim development on large losses in the Dubai operations, which together had a negative impact of about Rs 160 crore, Bhaskar explained.
“With the COVID situation improving, we look forward to improved performance in the coming quarters.” said Bhaskar.
NIA has seen its gross premium marginally falling from Rs 9,013 crore in Q4 FY 2020-21 to Rs 9,000 crore in Q4 Fy 2021-22.
For the period ended 31st March 2022, gross direct premium income in India grew by 14.08 per cent to to Rs 37, 127 crore vis-a-vis the industry growth of 11.03 per cent. The growth rate was higher than the industry, and the company increased its market share to 14.75 per cent during the year.
The Combined Ratio of the general insurer has marginally improved from 123.61 per cent in Q4 Fy 2020-21 to 122.60 per cent in Q4 2021-22.Any combined ratio, one of key indicators of profitability of a general insurer, below 100 per cent means the company is having underwriting losses as it has paid more claims over premium.
The underwriting losses of NIA have gone up by 34 per cent y-o-y from Rs 1,330 crore in Q4FY 2020-21 to Rs 1,781 crore in Q4 2021-22.
The insurer’s health and personal accident business has made an underwriting loss of Rs 1,240 crore, almost double of motor portfolio, in Q4 2021-22.
NIA has made underwriting profits in crop, liability . engineering and miscellaneous business in the reporting quarter.
The investment income of NIA has fallen by 46 per cent y-o-y to Rs 831 crore in the reporting quarter, For the whole year, the investment income has gone up from Rs 4,322 crore in Fy 2020-2021 to Rs 4,680 crore in Fy 2021-22.-
The solvency of the company has dipped to 1.66 per cent in the reporting quarter as against 213 per cent in the year ago period.