NIC eyes 10% rise in premium income this fiscal: CMD

National Insurance Company (NIC), country's second-largest general insurer, is eyeing a 10 per cent premium growth to Rs 12,375 crore in this fiscal from Rs 11,282.64 crore in 2014-15.
"Taking into view the current market dynamics, the expected growth for the industry is in the range of 12-13 per cent. We are eyeing a growth of 10 per cent to Rs 12,375 crore in FY16," Rajesh Aggarwal, Joint Secretary in the Finance Ministry, who has been given the additional charge as the Chairman and Managing Director of NIC, told PTI.
"We would focus on motor and health segments during the year. NIC is a major player in motor insurance and the second largest player in health. The aim would be to maintain leadership in the motor insurance space and achieve the pole position in health," he said.

The company's net profit rose 18 per cent to Rs 967.64 crore in 2014-15 from Rs 823.32 crore in 2013-14.
On completion of three months as the CMD of NIC, Aggarwal's term was renewed on August 27 and he has been asked to continue in the job till the appointment of a regular CMD.
NIC had recorded a premium income of Rs 11,282.64 crore in 2014-15, while its investment income rose to Rs 2,654 crore in FY15 from Rs 2,263 crore in FY14.

However, with combined ratio of 114.99 per cent in FY15, the underwriting losses went up from Rs 1,217 crore in 2013-14 to Rs 1,462 crore in 2014-15.

"NIC has reached the No 2 position after years of high-and-above industry average growth and we are determined to retain this position. With the momentum built-up in the organisation, we are confident of doing so," he said.
"With the hike in FDI cap in the insurance sector to 49 per cent, more players will enter the market and market share of existing players will naturally come down," he said.
On public sector general insurers losing market share to their private sector counterparts, Aggarwal said, "What is important and significant is that despite all competition, the four public sector general insurance companies have shown good growth and held on to the top four positions in the industry in a consistent manner."

"Our objective is to achieve premium growth above the industry average whereby our market share will improve. We will do this without losing focus on bottom line," he said.
On whether the company will raise capital from the markets as the new insurance laws allow insurers for the same, Aggarwal said, the regulator has just released the exposure draft of the proposed regulations permitting issue of preferential shares and subordinated debt by domestic insurers.
"We are examining the same and will be submitting our views to the regulator. We are also awaiting the revised regulations, if any, on solvency requirements. Though we are adequately capitalised at present we will take a view on raising additional capital after relevant regulations are notified," he said.

On manpower position, he said NIC has shortage of officers at the middle-level as it had stopped recruitment for many years. However, the company has been recruiting officers and clerical staff in the recent times.
To augment our resources in the north-eastern states, the company has initiated a special recruitment drive and recruited 20 young persons of the area, he explained.
On whether four public sector general insurers should be merged, he said although all the four companies are government-owned, each has evolved over a period of time as a distinct entity with its own unique business composition, profile, culture, strengths and market position.

"There should be a free flow of market forces and the industry needs more and not less players. Merger at this juncture of these large entities will take away the focus from business and is not advisable," he said.