Oriental Insurance posts Rs 15 bn net for FY18 on boost in treasury income

State-owned Oriental Insurance has posted Rs 15.1 billion profit for the financial year ended March 31, 2018, with improvement in treasury income and restructuring of business strategy.

The company had booked loss of Rs 16.91 billion in 2016-17.

The company collected a gross premium of Rs 117 billion in 2017-18, as against Rs 111 billion in the previous financial year.

The investment income of the insurance increased with improvement in treasury operation to Rs 33.23 billion from Rs 23.41 billion in the FY'17.

"At the beginning of 2017-18, our company had consciously committed to improve the quality of business and consolidate financial strength. As a result, our measured approach to growth saw us moderating our health insurance business as against market growth largely due to the pruning of loss-making portfolios," Oriental Insurance CMD A V Girijakumar told reporters.

Oriental has grown broadly at par with the market in respect of motor business which is the largest portfolio, he said.

Underwriting losses have come down to Rs 19.23 billion as against Rs 43.36 billion in the previous financial year.

The solvency margin of the company improved to 1.67 last financial year, from 1.11 in 2016-17.

As per the Insurance Regulatory and Development Authority of India guidelines the insurance companies should maintain a solvency margin of 1.5.

At the same time, the combined ratio of the company also enhanced to 117 per cent from 148 per cent in the previous year.

There was a proposal by the government to merge three public sector general insurance companies (PSGICs) -- National Insurance Company Ltd, Oriental Insurance Company Ltd and United India Insurance Company Ltd.

The then Union Finance Minister Arun Jaitley in the Budget speech had announced earlier this year that the three companies would be merged into a single insurance entity. The process of the merger is likely to be completed during the current financial year.