Neerja Kapur, CMD, NIA
NIA has declared a dividend of Rs 1.93 per share with a face value of Rs 5
NIA’s underwriting losses have fallen by 5 per cent y-o-y to Rs 1,690 crore in Q4FY23
Operationally, the company looks forward to an improved performance in FY24 in terms of premium growth, loss ratio, combined ratio as well as profits, said Neerja Kapur, CMD, NIA
New India Assurance(NIA), the country’s largest general insurance multinational, has returned to profit with a net income of Rs143 crore in Q4FY2023 as compared to a loss of Rs 549 crore in the year-ago period.
The company’s board met on Monday and has approved a dividend of Rs 1.93 per share with a face value of Rs 5.
With a total premium of Rs 10,434 crore, up 16 per cent year on year(Y-O-Y), in the reporting quarter, the company’s underwriting losses have fallen by 5 per cent y-o-y to Rs 1,690 crore in the same period.
For FY2022-23, the company, with operations in 26 countries, has mobilised a premium of Rs 38,791 crore, up 5.31 per cent y-o-y and has seen its net profit zooming by over five fold to Rs 1055 crore.
The general insurers has earned a premium of Rs 34.487 crore by issuing 3 crore policies in different segments from the domestic market and at 13.42 per cent, it has the the highest share in Indian general insurance market.
“After a challenging FY22 where the company’s performance was adversely affected by COVID claims, the company has delivered good results in FY23. The gross written premium increased by only 5.3 per cent as the company pursued its strategy of growth with profitability, which meant that the company had let go of some businesses where the price was not adequate. The profit after tax has increased to Rs1055 crores in FY23 as compared to PAT of Rs164 crs of FY22, an increase of 543 per cent, said Neerja Kapur, CMD, NIA.
The company has managed to bring down its combined ratio to 119.47 per cent (122.60 per cent in Q4FY2022) in Q4FY2023 and has improved its solvency ratio 1.87 (1.66 in Q4Fy2022) in the reporting quarter.
Any combined ratio of above 100 per cent for a general insurer means company’s outgo consisting of claims and procurement cost is higher than the premium it is earning.
The underwriting results were negatively impacted to an extent of Rs 224 crore due to adverse development of claims pertaining to previous years in the crop line of business. CAT losses in foreign operations in the fourth quarter also negatively impacted the results, with the full year results getting adversely impacted by 107 crore, explained Kapur.
While almost doubling its investment income to Rs 1,610 crore, the general insurer has improved its expense management to 19.86 per cent in Q42023 from 23.02 per cent in Q4fy2023.
NIA’s incurred claims ratio has also marginally improved to 97.93 per cent( 99.93 per cent FY 2022) in Q4FY2023.
Some of the bleeding portfolios of the company are- Fire, Motor, Health, NIA’s largest line of business and Crop while segments like Marine, Liability and Aviation have been profitable for the company in fourth quarter of the last fiscal.
Even, with investment income, Health and Crop have remained loss making business for the company but Motor has become profitable.
In FY 2023, Health (including personal accident) has contributed Rs 17,334 crore of premium, constituting 45 per cent of NIA’s total annual business while Motor has generated Rs 8975 crore of premium with a 26.64 per cent share in the company’s premium kitty.
In FY23, the company absorbed the entire impact of wage arrears and additional provisioning on account of employee benefits to the extent of Rs 3445 crore, which was partially offset by investment income due to good market conditions, informed the company.
Operationally, the company looks forward to an improved performance in FY24 in terms of premium growth, loss ratio, combined ratio as well as profits, said Kapur.
According to the company, its Motor portfolio is witnessing growth once again after many years of muted performance and steps are being taken to reduce its loss ratio . The revised product filing guidelines have ensured that the time to market for new products has decreased significantly. The company will be launching several new products in the coming year.
The company’s investment assets at market value has risen to Rs 86,111 crore in fy2023 from Rs 83,372 in Fy 2022.