Loss making public sector general insurer National Insurance Company is planning to reduce its underwriting losses progressively in next three years to achieve breakeven.
“We have started measures to bring down underwriting losses two years back where we are looking at the premiums and claim ratios. We have exited a lot of loss making products, especially on group health. We have repriced many group health products,” company’s general manager T Babu Paul said on the sidelines of the 8th edition of “Insureind”, organised by the CII here.
The general insurance company’s net loss stood at Rs 1,679 crore in FY22 against a net loss of Rs 565 crore in FY21. During the financial year 2018-19, the company had incurred a net loss of `1,696 crore.
“The company has plans to clock underwriting breakeven in next three years,” Paul said.
During FY22, the company’s combined ratio, a measure of underwriting profitability of a non-life insurance company, stood at 134% as against 121% during FY22. “We want to progressively reduce our combined ratio to 100-105% in next three years time, driven by technology adoption,” the general manager said.
During FY23, every state-run general insurer lost the market share in terms of gross direct premium underwritten amid intense competition from private sector peers, data from the General Insurance Council showed.
As the insurers continue to lose market share, it reflects weakness in their solvency positions and underwriting performances, constraining their overall profitability.
“We are focusing on retail business. Our retail growth last year was in single digit. We are looking at growing our retail book by double digits with the tweaking in commission,” Paul said.
Notifying the payment of commission regulations for the insurance industry, came into effect from April 1, insurance regulator Irdai replaced the earlier caps on commission payments in different lines of business with an overall cap on expenses of management at the company level. Now, all insurers have the flexibility to pay commissions to agents and insurance intermediaries.
NIC’s board is likely draw the company’s new commission policy within the next three months.