The SBI General Insurance has kick started FY 2018-19 with strong note including a net profit of Rs 113 crore, an underwriting profit of Rs 7 cr and a positive combined ratio of 99 per cent in Q1.
The company had a profit before tax of Rs 113 cr in the reporting quarter as against Rs 50 cr in Q1 FY 17-18. However, the company had not paid any taxes during the reporting quarter as it had losses in earlier yeas.
The company, intending to float its IPO within one year, has also become the second general insurance company after Baja Allianz General Insurance to have an underwriting profit in the reporting quarter versus an underwriting loss of Rs 46 cr in Q1 FY 2017-18.
The general insurance company had a combined ratio, key parameter in assessing the profitability of a general insurer,of 99 per cent in reporting Q1 as against 111 per cent in the corresponding quarter of 2017-18.
Rikhil Shah, CFO, SBI General Insurance said, “Our entire accumulated losses have been wiped out and we are likely to achieve a growth of 20 % in ROE post tax by the fiscal-end.We have witnessed a growth of 52% in Q1 FY 18-19 against an industry growth of 12%. We are looking 30 per cent of topline growth by the end of the fiscal. Also, we are looking at ROE growth by 20 per cent in the current fiscal.”
The company’s Gross Written Premium (GWP) also witnessed a significant growth of 52 per cent to Rs1,011 cr in Q1, FY 18-19. from Rs 667 cr in Q1, FY 17-18.
The top four portfolios of the company include Crop, Health, Fire and Motor during the quarter. Agriculture premium for the SBI General was at Rs 330 crore in Q1 2018-19.
The solvency ratio for Q1, FY 18 – 19 improved to 2.38, against 2.30 for the same period, last year.
However, the company’s claim ratio has marginally gone up to 75.2 per cent in Q1 2018-19 as against 70 per cent in the year ago quarter.
“Claim ratio has been increased marginally in the reporting period because skewed claims in fire and provisioning done for crop insurance segment,'' explained Shah.
The company had an investment income of Rs 106 crore in the Q1 2018-19 as against Rs 96 crore in year ago quarter.
The company’s operating expenses ratio to gross written premium has fallen to 13.4 per cent in Q1 2018-19 from 23 per cent in Q1 2017-18.
The asset under management (AUM) of the company has risen to Rs 5,621 crore in Q1 2018-19 from Rs 4,423 crore in year- ago quarter.