Oriental Insurance FY06 net down 14% at Rs284cr

Oriental Insurance has registered a 14.1% drop in net profit at Rs 283.91 crore in FY06 when compared with Rs 330.52 crore in FY05.

The state-owned General Insurance Company's (GICs) governing board has proposed a dividend of Rs 50 crore (50% on Rs 10 share) for FY06. 

The fall in net profit in 2005-06 was caused by a combination of large claims from Maharashtra following floods there, increase in expenses because of a salary hike and a large provision for an income tax case that is under litigation.

The highlight of Oriental's performance in FY06 was the reduction in the claims ratio of the motor portfolio, which generally forms about 45% of the company's total portfolio, M Ramadoss, chairman & MD of Oriental, said.

Oriental's net incurred claims ratio in the motor porfolio in FY06 was 92.64%, lower than the preceeding year's claims ratio of 112.52%. The fall in the ratio was primarily on account of the higher number of disputes on motor claims that the company has been able to settle. In FY06, the company settled 86,427 cases as against 78124 cases that were settled in the earlier year.

Oriental's gross premium in FY06 was Rs 3,609.77 crore, higher by 16.8% in relation to the previous year's gross premium of Rs 3,090.55 crore. The size of the gross premium makes Oriental the second-largest general insurer in India after New India Assurance, Oriental executives said.