New India Assurance posts one-off loss of Rs 200 cr in Q2FY24 due to floods

The New India Assurance printed a loss of Rs 199.99 crore in the July-September quarter of financial year 2023-24 as compared to a net profit of Rs 33.45 crore in the year ago period as a result of surge in expenses and as a result of CAT losses due to floods.

The net profit of the state owned insurance company was Rs 260.23 crore in the first quarter of financial year 2024.

The expenses of the general insurer jumped 20.84 per cent to Rs 10652.83 crore in the reporting quarter from Rs 8815.39 crore in the same quarter of FY23 mainly due to increase in the operating expenses and commissions and brokerage cost of the company.

Commenting on the results Neerja Kapur, CMD said “Q2FY24 was one of the most challenging quarters for the company in recent times. The company suffered CAT losses on account of floods amounting to a net of Rs 301 crore during the quarter. There was adverse development in the aviation portfolio of about 50 crore. The foreign operations were also under pressure as they reported losses of about 71 crore during the quarter driven by risk losses in Dubai operations and CAT losses in UK operations.”

Further she added that “While a confluence of multiple events affected the results for the quarter, Motor and Health portfolio registered growth. The profitability of these lines should improve going forward.  Agency channel has also started growing at a healthy pace. The company expects to deliver improved results in the ensuing quarters.”

The income of the general insurer contracted by 4.76 per cent to Rs 9839.07 crore in the second quarter of FY24 from Rs 10331.07 crore in the corresponding year ago quarter on account of decline in income from investments.

The income from investments saw a decrease of nearly 46 per cent to Rs 1633.17 crore in Q2FY24 from Rs 3022.60 crore in July-September quarter of FY23.

The Gross Premium Written (GWP) of the company increased by 6.20 per cent to Rs 9397.2 crore from Rs 8848.41 crore of the corresponding quarter of the last fiscal year.

The underwriting loss of the largest general insurer widened to Rs 2446.93 crore from Rs 1506.92 crore in Q2FY23.

The combined ratio of the company fell to 130.77 per cent from 121.25 per cent in the second quarter of FY23 whereas the solvency margin slipped to 1.70 per cent from 1.77 per cent in Q2FY23.