“Yes, we have improved on all key parameters of our operations to earn some profit in the first half the year. Going forward, our efforts will be to sustain profitability. Our primary focus will be profitability and not just the topline growth. We now know the pain points and would work on them to remove them ,’’ said Rajeshawri Singh,who became CMD of the company on Sept 1
Charting out a major revival from the deep losses for 5 years, Kolkata based state owned National Insurance Company (NIC), though still deficient in capital and solvency, is back in black during the first half of the current fiscal ended 30th September.
In a development, which is not only significant for NIC but also for the entire PSU general insurance industry, the insurer has recorded a net profit of Rs 45 crore during H1 FY 24 as compared to losses of Rs1768 crore in the year-ago period.
The company’s board had met on Tuesday to finalise its half yearly results.
“Yes, we have improved on all key parameters of our operations to earn some profit in the first half the year. Going forward, our efforts will be to sustain profitability. Our primary focus will be profitability and not just the topline growth. We now know the pain points and would work on them to remove them gradually,’’ said Rajeshwari Singh, who became CMD of the company on Sept 1.
The company had losses of Rs 3865 crore during FY 2022-23.
Its underwriting losses have improved from Rs 2828 crore on H1FY2022-23 to Rs 1709 crore in six months ended September 30.
Accordingly the insurer’s combined ratio, on the key ratio for the measurement of profitability in a general insurance company, has fallen to 123 per cent in the first half of the current fiscal from 147 per cent in the year-ago period.
NIC’s incurred claim ratio(ICR) has improved from 102 per cent in HIFY23 to 91 per cent in H1FY24 while its expenses of management has fallen sharply Rs 1638 crore in H1FY24 from Rs 2978 crore in the year-ago period.
“We have a gone for a complete restructuring of our health portfolio, contributing half of the company’s premium, helping the profitability of the company,’’ said Singh adding that the company is working on plans and has taken baby steps to bring down losses in the motor portfolio.
The insurer is going digital extensively and even adopting automation in motor claim settlement.
Having centralized hubs for claims is helping the company to control claims, frauds and standardising the claim settlement processes, said Singh.
NIC’s investment income has gone up to Rs1582 crore in the first six months ended September 2023 from Rs 1412 crore in the year-ago period. It has an asset base of over Rs 28,000 crore
The company had a net premium of Rs 7255 crore, up 12 per cent year on year(y-o-y) in the reporting period.
The insurer’s Fire and Marine portfolios have remained profitable during the reporting period.
“ We will be requiring capital from the government to grow our business and to remain solvent. It will take some time to achieve all the financial goals of the company,’’ said Singh.