Despite underwriting losses in several segments, New India Assurance Co reported a net profit of Rs 1,008 crore for 2016-17, an increase of 22% over the previous year, largely boosted by income from investments. The country’s biggest general insurer registered an investment income of Rs 4,509.44 crore in 2016-17, against Rs 3,953.43 crore in 2015-16. The market value of investments stood at Rs 53,009 crore in 2016-17 compared with Rs 45,257 crore in 2015-16. The insurer, which is likely to hit the markets in the next six to eight months, has seen underwriting losses in the health, motor, crop insurance and fire insurance segments.
New India’s net worth including the fair value of investments increased to Rs 34,716 crore in the last financial year from Rs 28,895 crore in 2015-16. The insurer recorded a global premium of Rs 22,279 crore in the last fiscal with a growth of 21.27%, the Indian premium was Rs 19,115 crore with a growth of 26% in 2016-17. However, the company saw underwriting losses in the health, motor, engineering and fire segments.
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Chairman and managing director G Srinivasan also added that they have 100% of loss ratio in the crop insurance. “While we are still making underwriting losses, we expect to break even on the underwriting front in the next three years,” Srinivasan said. The insurer’s combined ratio stood at 118% at the end of FY17. The company recruited 10,000 agents in 2016-17 and plan to hire 12,000 in current financial year. About 150 micro offices were opened in small centres to encourage insurance inclusion. For the current fiscal, they plan to open 250 micro offices. Currently, brokers contribute around 22%, agents 60% and the remaining in direct to the overall business.
New India Assurance is the leader in the general insurance industry with a market share of nearly 16%. The insurer has set a target of Rs 26,000 crore for this financial year, including both India and other countries. Further, to expand its reach, New India will tie up with three large banks in the coming few days.