Public sector general insurance behemoth United India Insurance has reported a 36% growth in net profit for the year ended March 31 to R527 crore against R387 crore on the back of a 13% growth in total premium to R9,266 crore, an accretion of R1,087 crore over the previous financial year. This is despite an additional provision of R280 crore towards third party liabilities and an increased operational expenditure of R2,001 crore (R1,566 crore), said Milind Karat, chairman and managing director, UII. For the currentfinancial year of 2013-14, UII set a target of R11,000-crore premium with a profit of R600 crore, Karat said.
Addressing presspersons here on Monday to announce annual results, he said the claims ratio has come down to 84.61% during the year under review against 88.50% in the previous financial year due to better underwriting practices and claims control measures. The company has brought down its underwriting loss to R1,193 crore during the year compared to R1,222 crore in the previous year.
?We are on track to make profits even at the underwriting level over the next two to three years,? he said.
An investment income of R1,777.41 crore (R1,600 crore) during the year under review also helped the company to post better results, he said, adding the market value of the company?s total investment portfolio stood at R19,950 crore and the networth grew 9% to R4,952.63 crore.
However, due to overall decline in market buoyancy, the market share of the company declined to 13.5% from previous year?s 14.93% and growth also declined to 13.29% against the public sector industry?s growth of 14.64%, Karat maintained.
The company has made an anual provision of R431 crore towards pension and gradual liabilities, he added.
The solvency ratio is pegged at 2.51 during the year under review against 2.71. Portfolios such as motor, health, fire have seen grown in premium however, motor and health continue to make losses.
Insurer to hire consultant to sustain growth
UII has invited a request for proposal to appoint a consultant to not only grow aggressively but to sustain growth over the years. The company will finalise a consultant in a month?s time, said CMD Milind Karat. Karat said: ?We now felt that this is the right time to undergo second wave of transformation when the R69,000-crore industry is looking better with lot of changes and competition and has been reporting a growth of 18% to 20%.? He added: ?The new consultant would suggest us on various areas, including better employees productivity across all areas, reducing the claim ratio, which has been alarming on motor and health portfolios per se, optimum utilisation of IT infrastructure, among others. We hope that this initiative will help us keep our growth momentum over the years. We hope to finalise a consultant in a month?s time.? Also, UII, along with other public sector general insurers such as New India Assurance, National Insurance and Oriental Insurance, is expected to float a common TPA by September to bring down the rising health insurance claims ratio.