New India Assurance Company Ltd up 2% on May boost to market share

New India Assurance Company Ltd rallied 2 percent in afternoon trade on June 7 on an increase in its market share in the general insurance sector in the month of May.

The largest government-owned general insurance player grew 9.67 percent to Rs 2,421 crore in May, with its market share improving to 18.51 percent from 17.07 percent in the year-ago period.

At 1.03 pm, the stock was trading 1.90 percent higher at Rs 120.50 on National Stock Exchange.

Q4 performance

The company’s global gross written premium rose 5.3 percent to Rs 38,791 crore in the March quarter of FY 23 from the year-ago period.

The net earned premium has jumped 4.59 percent YoY to Rs 31,127 crore. Profit after tax (PAT) has jumped by 543.29 percent to Rs 1,055 crore YoY, the insurer said in a BSE filing.

Management commentary

CMD Neerja Kapur said after a challenging FY22, where the company’s performance was adversely affected by COVID claims, it delivered good results in FY23.

The gross written premium increased by only 5.3 percent as the company pursued its strategy of growth with profitability, which meant that the company had let go of some businesses where the price was not adequate, she said. The underwriting results were negatively impacted to an extent of Rs 224 crore due to adverse development of claims pertaining to previous years in the crop line of business, she said.

CAT losses in foreign operations in the fourth quarter also negatively impacted the results, with the full-year results getting adversely impacted by Rs 107 crore.

In FY23, the company absorbed the entire impact of wage arrears and additional provisioning on account of employee benefits to the extent of Rs 3,445 crore, which was partially offset by investment income due to good market conditions.

“Operationally, the company looks forward to an improved performance in FY24 in terms of premium growth, loss ratio, combined ratio as well as profits,” she said.

The company has rolled out its price increases in retail health after a gap of six years. The pricing in the group health segment has been tightened.

The motor portfolio is witnessing growth once again after many years of muted performance and steps are being taken to reduce its loss ratio, the CMD said.

“The revised product filing guidelines have ensured that the time to market for new products has decreased significantly. The company will be launching several new products in the coming year,” she said.

Stock performance

New India Assurance has given a return of 14.55 percent over the last six months, outperforming the Nifty, which gained 0.75 percent in the same period.

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