“While India International plans to expand cautiously in cargo and property lines, we do not expect this to materially alter the premium mix or weaken its risk profile.In our view, rising geopolitical tensions and supply-chain disruptions will moderate India International’s business growth over the next two years. We assume the insurer’s premiums will increase by 5%-7% during this period, in line with industry trends,” added S&P
SINGAPORE: S&P Global Ratings today affirmed its ‘A-‘ long-term issuer credit and financial strength ratings on India International Insurance Pte. Ltd. The outlook is stable.
The ratings on India International reflect our view of the insurer’s satisfactory competitive position, supported by its moderate market presence and brand recognition, and its robust capitalization.
“We expect India International to remain geographically diversified, albeit more Singapore-weighted. The insurer’s business profile is becoming increasingly anchored in the low-risk Singapore market with reduced exposure to loss-making overseas marine accounts. The share of Singapore-sourced gross premiums has risen to more than 65%, from about 40% in a few years back. We have revised our assessment of India International’s industry and country risk to low from intermediate to reflect its increasing exposure to the stable, albeit competitive, Singapore market.” said S&P Global Ratings.
India International Insurance Pte Ltd (III), was incorporated in Singapore, in 1987 by merger of five State owned, Indian insurance companies General Insurance Corporation of India (GIC Re), The New India Assurance Co. Ltd, and The Oriental insurance Company Ltd, National Insurance Co. Ltd., and United India Insurance Co. Ltd.
Rajeshwari Singh Muni, CMD of National Insurance Company is the chairman of the company.
Its business emanates from across the globe, and possess strong reinsurance support. With client range from retail to big corporates worldwide, our product lines include Motor insurance, motor fleet, personal accident, travel insurance, home insurance, maid bonds package, property, liability, engineering, surety, cargo and marine hull insurance.
India International will likely maintain solid capitalisation over the next two years, driven by a steady accumulation of retained earnings. The solid capitalization cushions the insurer against market volatility, stated S&P.
“While India International plans to expand cautiously in cargo and property lines, we do not expect this to materially alter the premium mix or weaken its risk profile.In our view, rising geopolitical tensions and supply-chain disruptions will moderate India International’s business growth over the next two years. We assume the insurer’s premiums will increase by 5%-7% during this period, in line with industry trends,” added S&P.
This projection accounts for competitive pressures in the motor and property lines. It also reflects India International’s careful approach to the marine business, given macroeconomic headwinds. explained the rating agency.
However, India International’s moderately high unhedged currency positions and equity investments increase earnings volatility. The insurer’s modest capital size also exposes it to material single-event risks. In our view, India International will maintain adequate reinsurance protection and effectively manage risks to reduce its insurance risk exposure.
“We expect India International’s disciplined underwriting in volatile marine lines, and measured expansion in motor and property segments to sustain its underwriting profitability through 2028. Our base case assumes an International Financial Reporting Standards 17 combined ratio of 89%–91% over the next two years. A ratio below 100% indicates underwriting profit,” added S&P.
India International has adequate liquidity, with significant holdings of liquid assets and limited refinancing needs.
The stable rating outlook reflects our expectation that India International will continue to improve its underwriting performance over the next two years. This will be backed by sustained profitability across the inherently volatile marine-hull business and the competitive motor portfolio.
The insurer will also benefit from increased business diversification in line with its growth strategy.
” We expect India International’s strong financial risk profile to support its credit profile.We may lower the ratings if the improving trend in India International’s underwriting performance reverses, or the quality of its business weakens, leading to a substantial deterioration in earnings over the next two years.We could raise the ratings if India International significantly improves its competitive position while maintaining a strong financial risk profile,” elaborated S&P.