Bajaj Finserv on Thursday reported a 2.63% year-on-year drop in its consolidated net profit to Rs 1,256 crore in the October-December quarter. Its consolidated income during Q3FY22 increased 10% to Rs 17,620 crore.
“Economic conditions were better in Q3FY22 as compared to Q2FY22, although some key indicators like auto sales remain muted. The quarter also witnessed adverse weather events which impact the general insurance business. Towards the end of Q3, emergence of the Omicron variant has sparked renewed concerns on its spread and containment measures. Under these dynamic circumstances, our businesses focused on growth,” the company said.
Bajaj Finserv is the holding company for the financial services businesses under the Bajaj group with a 52.65% holding in Bajaj Finance (BFL) and 74% holding in two unlisted subsidiaries, Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company Limited (BALIC). It also holds stake in Bajaj Finserv Direct, Bajaj Finserv Health, a digital health care venture and the Bajaj MF and Bajaj Asset Management companies. The results of these subsidiaries are reflected in the consolidated results of Bajaj Finserv.
Bajaj Finance reported a 85% growth in net profit to Rs 2,125 during the Q3FY22. But the two insurance companies reported a decline in profits during Q3FY22. BAGIC’s net profit reduced to Rs 304 crore from Rs 300 crore in same quarter a year go. BALIC profit after tax declined by 25% to Rs 88 crore. BALIC attributed this drop to the strain from higher share of new business.
BAGIC’s gross written premium for Q3FY22 stood at Rs 2,959 crore versus Rs 3,392 crore in Q3FY21. Net earned premium for Q3FY22 was Rs 1,930 crore as against Rs 1,838 crore in Q3FY21. BAGIC’s claim ratio increased to 69.6% in Q3FY22 from 66.6% in Q3FY21. “The increase in claim ratio includes losses from heavy rainfall in Uttarakhand and Tamil Nadu and higher losses on crop insurance,” the company said. The company’s solvency ratio as on December 31, 2021, was 333%.
BALIC’s new business premium for Q3FY22 rose by 39% to Rs 2,377 crore. Individual rated new business premium was up 68% to Rs 1,033 crore in Q3FY22. Group protection new business increased by 66% to 717 crore in Q3FY22. Renewal premium for Q3FY22 grew by 18% to Rs 1,702 crore. Gross written premium increased by 30% to Rs 4,079 crore. BALIC’s solvency ratio stood at 604% as on 31 December 2021.
The company said a sharp surge in infections was being witnessed across India, with daily infection rates of the kind not seen in the previous two waves. It was difficult to predict how long this third wave would last and when it would subside to manageable levels so risk is expected to remain elevated in Q4 of FY22, the company said.