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Informist, Tuesday, Jan. 28, 2025

By Siddhi Chauhan and Vaishali Tyagi

MUMBAI – The New India Assurance Co. Ltd.'s net profit for the quarter ended December slumped 50.6% on year as a sharp fall in income from investments dragged total income down. On a sequential basis, however, the insurer's bottom line nearly quadrupled due to reversal of provision for tax. The company's pre-tax profit fell 86.6% on year.

The company's net profit for Oct-Dec surged to INR 3.53 billion from INR 710 million for the September quarter as it reversed tax provision of INR 2.37 billion. The company had made a provision of INR 1.54 billion in the year ago quarter.

The company's total income for the December quarter fell 4.1% on year to INR 101.94 billion. On a sequential basis, the total income rose 1%. The fall in total income was mainly due to a drop in income from investments, which fell sharply by 31.1% on year to INR 11.60 billion. Sequentially, the income from investment in the December quarter fell 25.8%.

As was the case in Jul-Sept, New India Assurance posted an operating loss in Oct-Dec, but it was significantly lower at INR 2.90 billion than INR 4.86 billion in the preceding quarter. In the third quarter of FY23, the company had reported an operating profit of INR 3.21 billion, buoyed by higher income from investments.

Rise in underwriting loss also weighed on the company's bottom line. In the December quarter, the company reported an underwriting loss of INR 14.51 billion against INR 13.63 billion a year ago, and INR 20.5 billion in Jul-Sept.

New India Assurance's gross premium written saw a moderate rise of 1.1% from a year ago to INR 107.78 billion in the December quarter. In comparison to the quarter ended September, the gross premium written rose by 12%. Net premium written rose by 4.2% on year to INR 89.20 billion in the December quarter and by 10.6% on a sequential basis.

"The gross written premium growth (for Apr-Dec) at 2.4% was muted as the company had taken a conscious call to not renew certain large accounts where premiums were inadequate," Chairman and Managing Director Girija Subramanian said in a presentation to investors. "The operating metrics have shown improvement with the incurred claim ratio coming down to 97.38% from 98.07%." 

The company's total expenditure for the quarter under review rose marginally to INR 104.88 billion from the previous year. On a sequential basis, the expenditure remained flat. Net commission of the insurer increased 17.7% on year to INR 8.65 billion. Operating expenses related to the insurance business fell 15.27% on year to INR 10.83 billion, but rose 3.5% sequentially.

The combined ratio for the insurance company was 119.08%, lower than 120.34% a year ago. The company's solvency ratio as on Dec. 31 was 1.9 times, compared to 1.72 times a year ago.

For the nine months ended December, the company's net profit fell 17.3% from a year ago to INR 6.41 billion. Total income remained flat at INR 301 billion. The company announced its results after market hours on Monday. At 1440 IST on Tuesday, shares of the insurance company were down 0.8% at INR 172.76 on the National Stock Exchange.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Ashish Shirke

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