New India Assurance Company, the country’s largest non-life insurer, reported a net profit of Rs. 530 crore in Q2FY20, a rise of 61% from the previous year.
New India Assurance Company, the country’s largest non-life insurer, reported a net profit of Rs. 530 crore in Q2FY20, a rise of 61% from the previous year. The gross premium written by the insurer stood at Rs. 8,249 crore in Q2 against Rs. 6,505.14 a year ago.
Atul Sahai, chairman and managing director of New India Assurance, said, “It is heartening that the company has recorded encouraging results despite a challenging operating environment. These results are despite the company incurring significant losses to its net — around Rs. 335 crore during the quarter — due to floods in different parts of the country. There is a slowdown in the motor segment. Provisions towards bad debts and dimunition in value of certain equity investments further impacted profitability by Rs. 40 crore in the quarter.”
The data from General Insurance Council shows that gross direct premium income underwritten by New India Assurance in the first six months of the current fiscal for the motor insurance stood at Rs. 4,231.91 crore compared to Rs. 4,307.30, down by 1.75%. Motor insurance has been impacted by the fall in new vehicle sales in the last few months.
On Wednesday, the stock of New India Assurance ended the day at Rs. 150.55, down by 1.05% on the BSE. The incurred claims ratio decreased from 98.51% in Q2FY19 to 92.85% in Q2FY20, while the combined ratio improved from 124.7% to 117% during the quarter.
“Foreign business continued to be profitable during the quarter. The company continues its focus on reducing the loss ratio and combined ratio and deliver better results going forward,” added Sahai.
The solvency ratio of New India for Q2 stood at 2.08 times higher than the regulator’s mandated control level solvency ratio of 1.5 times.
According to the exchange filings, New India Assurance has seen underwriting performance improving in the fire, marine, health and aviation sectors in the second quarter of the current fiscal compared to the previous financial year.