Titus Francis, executive director, NIA

“NIA has delivered excellent results in FY24, despite adverse impact of several catastrophic claims during the year. It has recorded a 128 per cent growth in its net profit in Q4. On individual lines, Motor third party loss ratio saw an increase as there was no premium increase during the year. This was marginally offset by decline in the loss ratio of Motor Own Damage segment where price corrections were factored. The health segment loss ratio remains elevated and corrective steps are being taken. the company will continue its strategy to pursue growth with profitability,” Titus Francis, executive director, NIA

Mumbai:

With improved investment income, State owned New India Assurance (NIA) has more than doubled its net profit to Rs 354 crore in Jan-Mar quarter of Fy 24.

The board of NIA, which doesn’t have a regular CMD now, had met on Wednesday and declared a dividend of over 40 per cent at Rs 2.06 per equity share of Rs 5 for FY 24.

The country’s largest multinational general insurer, which has been following a strategy of boosting profitability by shedding loss making business, has recorded a higher premium of Rs 10,625 crore in the reporting quarter as compared to Rs 10,434 crore in the year-ago period,

The investment income of the company has gone up by almost 19 per cent to Rs 2663 crore in in the last quarter of FY 24 over Rs 2243 crore in the corresponding quarter of FY 23.

However, though all its portfolios except Health, the insurer’s largest portfolio, Motor and Miscellaneous, have made underwriting profits, the insurer’s combined ratio, one of the key ratio of profitability of a general insurance company, has slightly deteriorated to 121.48 per cent, due to higher catastrophic claims, in Q4FY 24 as against 118.31 per cent in Q4FY23.

Analysts point out that such deterioration has happened due to escalation of expenses of management(EoM). NIA’s EoM has risen up to 23.89 per cent in FY24 from 19.86 per in the year-ago period while its commission ratio has inched up to 8.74 per cent in Fy 24 from 7.75 per cent in FY 23.

NIA’s underwriting losses have risen by 18 per cent y-o-y  to Rs 1,879 crore in Q4 FY24, though , in positive sign, its incurred claim ratio has dipped to 95.19 per cent in Q4FY24 from 97.90 per cent in the year-ago period.

The solvency margin of the company also fallen to 1.81 in FY 24 from 1.87 in FY 23.Also,

In another encouraging trend towards better profitability, for the first time all the portfolios of the company have made operating profit except Health.

Commenting on the results, Titus Francis, executive director said, “NIA  has delivered excellent results in FY24 despite adverse impact of several catastrophic claims during the year. It has recorded a 128 per cent growth in its net profit in Q4. Even on individual lines, Motor third party loss ratio saw an increase as there was no premium increase during the year. This was marginally offset by decline in the loss ratio of Motor Own Damage segment where price corrections were factored. The health segment loss ratio remains elevated and corrective steps are being taken. Other lines did reasonably well. ‘’

The impact of catastrophic claims on the net incurred claims during the year was Rs.794 crore. During the 4thquarter, the results were adversely impacted by an impairment charge of  Rs.110 crore  on the Nigerian operations due to devaluation of Naira, he revealed.

The Indian general insurance industry has a long runway for growth, and the company will continue its strategy to pursue growth with profitability, said Francis.

The company’s gross written premium in FY 24 grew by 8.3 per cent to Rs 41,996  crore and profit after tax increased by 7 per cent to Rs.1,129 crore during year. .

The net worth of the insurer increased by 15 per cent to Rs. 44,704 crore in FY 24.

The general insurer has also started preparing for the wage revision of its employees that will be effective from Aug 2022.

“ Wage revision for employees of PSU general insurance companies is due from Aug-22. The company has made provision at 7 per cent of wage bill based on management assessment amounting to Rs 15567.67 lakhs towards wage revision in FY 24 and the total provision as on March 31, 2024 is amounting to Rs 25287.67 lakhs,” said NIA.