Effecting a remarkable turnaround in performance, Delhi based Oriental Insurance Company(OIC) has posted a net profit of Rs 1510 crores in 2017-18 as against losses of Rs 1691 crores in 2016-17.
The company which is one of the merged entities in the government’s proposed three way mega merger scheme along with National Insurance Company(NIC),United Insurance Company (UIC), has improved its solvency ratio to 1.67 per cent as against 1.11 in 2016-17.The Indian regulations demand a minimum solvency ratio of 150 per cent..
With a combined ratio of 118.5 per cent(148 per cent in 2016-17) in 2017-18, the underwriting losses of the company have drastically fallen to Rs 1923 crores in 2017-18 as against Rs 4336 crores in 2016-17.
The company’s incurred claim ratio(ICR) to the eared premium has shown a significant improvement from 112 per cent in 2016-17 to 85 per cent in 2017-18.
OIC has mobilised a total domestic premium of Rs.11452 crores, up 6 per cent over Rs10803 crores in 2016-17.
The company has an operating profit of Rs 1148 crore in 2017-18 as against losses of Rs 2400 in 2016-17 while profit before tax(PBT) of the company is at Rs 1383 crore in 2017-18 as against losses of Rs 1987 crores in 2016-17.
“We have set a 'Twin Target' for current year for the company, which is "Business Growth of 20 per cent and Combined Ratio of 110%". I am sure each of the OIC employee will rise to the occasion during 2018-19 in the some manner as they have demonstrated during the last year,’’ said Girija Kumar, CMD, OIC.
The Solvency Margin at the end of FY 18 reflects entirely OIC’s inherent and internal financial strength without any external dependency, said Kumar.
According to Kumar, OIC took a conscious decision, while adopting our 2016-17 financial results, to provide for entire amount of Technical Liabilities (Liabilities towards Policyholders) in one-go. without carrying forward any amount, based on best actuarial estimates. This was done because it conforms to the norms of best corporate governance practices and requirement of transparency & accountability.
Some of the corporate strategies, OIC followed that have yielded the desired results are-
-Focus on increasing Number of Policies for better retail spread.
– Careful monitoring and control of Management Expenses.
– Cutting down on Growth in Unproductive Group (Commercial) Health Insurance and declining renewals of loss making GPAs & GMCs and other unviable accounts.
– Effective monitoring towards expeditious claims settlement and overall claims management.
– Quoting for Crop Insurance on its own, with the help of HO Technical and Actuarial Team.
– Proper accounting and close monitoring of recoveries, co-insurance and reinsurance including XL recoveries.
“Let me reiterate here that the key elements of the strategy given above have to be consciously borne in mind in the current financial year also so that we ensure that Oriental marches from strength to strength,’’ he observed.