“FY24 continues to be a challenging year for the company. In the third quarter, the country witnessed catastrophic events like cyclone Michaung and floods in South India, Sikkim West Bengal. The net impact of these events on the company’s third-quarter results was about Rs 358 crore. This is in addition to the Rs 301 crore of catastrophe claims that adversely impacted the results in the first half. Considering this backdrop, the reported results have been excellent’’ Neerja Kapur, CMD, NIA
Despite being hit by frequent natural catastrophe losses during the current fiscal, New India Assurance, India’s largest general insurance multinational, has recorded a net profit of Rs 713 crore in the third quarter ended Dec 31.2023.
The general insurer, with operations in 26 countries, had a net profit of Rs 745 crore in Q3FY23.
The insurer’s board met today in Mumbai to approve its Q3FY23-24 results.
The company, with a domestic market share of 13.18 per cent in premium income, has mobilised a gross premium Rs 10,738 crore, up 15 per cent year-on-year(Y-O-Y) in the reporting quarter.
Commenting on the results, Neerja Kapur, CMD, NIA said, “FY24 continues to be a challenging year for the company. In the third quarter, the country witnessed catastrophic events like cyclone Michaung and floods in South India, Sikkim and West Bengal. The net impact of these events on the company’s third-quarter results was about Rs 358 crore. This is in addition to the Rs 301 crore of catastrophe claims that adversely impacted the results in the first half.’’
The motor own damage(OD) loss ratio improved while the third-party segment loss ratio was higher as premiums were largely unchanged in this segment. The health segment loss ratio is improving due to the price corrections undertaken in the retail segment and more prudent underwriting in the group segment although it has impacted the topline growth, Kapur elaborated.
`Considering this backdrop, the reported results have been excellent. The gross written premium grew by 15.4 per cent compared to the same quarter last year and 10.5 per cent in the nine months compared to the previous year. The profit after tax for the quarter was Rs 715 crore compared to a loss of Rs 200 crore in the second quarter. The profit after tax for the first nine months was Rs 775 crore compared to Rs 900 crore for the same period the previous year, Kapur explained.
According to the NIA chief, the investment environment has been buoyant, and the company’s net worth including fair value change account increased from Rs 37,957 crore in March 2023 to Rs 44,690 crore in Dec 2023. The solvency ratio of the company remains healthy at 1.72, added Kapur.
The Indian general insurance industry has a long runway for growth, and the company will continue its strategy to pursue growth with profitability, said Kapur, while signing off her last balance sheet for the company as she will be hanging her boots in April end after completing her 18 months tenure.
The company’s investment income of Rs 2371 crore during the reporting quarter has helped it to become profitable after absorbing higher underwriting losses.
NIA’s assets are estimated to be at Rs 94,512 crore till Dec 2023.
Though, except, Motor and Health, rest of the portfolios of the company have been profitable, its underwriting losses still have climbed up by 25 per cent y-o-y to Rs 1394 crore during the third quarter of FY 23-24 due to a series of catastrophe losses during the year.
However, this is also for the first time that so many portfolios of the company have not even made any underwriting losses.
NIA’s incurred claim ratio has slightly fallen to 92.60 per cent in Q3FY23-24 from 90.48 per cent in the corresponding quarter of the previous fiscal.
The combined ratio, reflecting company’s higher losses over premium income(including management expenses), has remained almost steady at 116.54 per cent during the reporting quarter as against 115.50 per cent in FyQ323.
With over Rs 4000 crore, Health has remained the company’s largest portfolio followed by a distant Motor, that has a premium base of Rs 2,887 crore in Q3FY24.
NIA’s share, that has seen substantial improvement in recent times, on Friday fell 4.48 per cent to close at Rs 289.
Analysts say the stock, going ahead, has further upward potential. ,