VRS may dent United India bottomline

The Chennai-based United India Insurance's net profit is likely to be affected by its voluntary retirement scheme (VRS) that will see an outgo of Rs 500 crore.

The company had garnered a premium income of Rs 3,080 crore in 2003-04 compared with Rs 2,970 crore in the previous year.

Addressing a press conference on the launch of its Arogyadaan in association with Andra Bank, V Jagannathan, CMD, United India Insurance, said, "Around 2,200 employees of cadre I, II and III had opted for VRS. Profits will depend on the amortisation of Rs 500 crore given as VRS to employees and accounts are yet to be finalised. The company achieved a net profit of Rs 214 crore in 2002-03."

Motor portfolio contributed 40 per cent and fire segment contributed 30 per cent to its total premium income. While marine and engineering portfolios accounted for 20 per cent and 10 per cent of the premium income, respectively.

The investment income was Rs 900 crore for the year ending March 31, 2004.

Under the Arogyadaan scheme, the insured person plus three family members are covered. This scheme provides mediclaim insurance coverage to Andhra Bank customers.

It will enable account holders of the bank to get compensation benefits for hospitalisation on nominal sum.