On the domestic front, the company was impacted by adverse performance of the crop line of business where poor climatic conditions led to claim estimates being revised higher, coupled with refund of some premium due to computation of the area correction factor.
State-owned general insurer New India Assurance Company reported a net loss of Rs 113.52 crore for the third quarter of the current fiscal, against a profit of Rs 617.29 crore during the corresponding period of the previous financial year. The loss in the third quarter was largely due to multiple global catastrophic events and higher claims in crop insurance.
Atul Sahai, chairman-cum-managing director, said, “Q3FY19 has been a challenging quarter for the company with multiple CAT events like Typhoon Trami, Hurricane Michael, California Wildfires, Kuwait floods and further adverse development in Hurricane Jebi and Hurricane Irma, severely impacting foreign operations in the UK, Japan, Bahrain, Aruba and Curacao. The overall impact of these events in Q3FY19 was about Rs 450 crore.
On the domestic front, the company was impacted by adverse performance of the crop line of business where poor climatic conditions led to claim estimates being revised higher, coupled with refund of some premium due to computation of the area correction factor. Underwriting losses from this line of business was Rs 161 crore for the quarter. The solvency ratio of New India for the third quarter stood at 2.25 times higher than the regulator’s mandated control level solvency ratio of 1.5 times.
The combined ratio stood at 127.19 percent in Q3FY19 from 109.13 percent in Q3FY18. Gross direct premium income (GDPI) increased to Rs 6,780.23 crore, compared with Rs 6,384.65 crore. The company said the investment income was impacted by about Rs 45 crore due to the write off (as per accounting policy) of equity investments in an infrastructure company whose net worth was eroded.
“The motor line of business continues to witness severe competition, but the company is taking steps to meet the challenges head on. On the positive side, steps taken to correct pricing in health line of business is getting reflected in the improved results by this line of business,” Sahai said.