Strong Q1 results, guidance lift New India Assurance shares by 18%

New India Assurance shares soar as insurer posts 80 per cent rise in profit, guided for lower combined ratio despite underwriting hit from Air India crash

Shares of state-owned New India Assurance Company, the largest non-life insurer, jumped almost 18 per cent on Wednesday, aided by strong quarterly earnings and guidance from the management.

 

The shares of New India rose by 20 per cent during the day and closed 17.7 per cent up at Rs 204.6.

 

The insurer recorded 80 per cent year-on-year (Y-o-Y) growth in net profit to Rs 391 crore in the April–June quarter of FY26 (Q1FY26), compared to Rs 217 crore in Q1FY25. Its gross written premium grew by 13.11 per cent Y-o-Y to Rs 13,334 crore, while investment income rose by 23.7 per cent Y-o-Y to Rs 2,290 crore.

 

 

On the other hand,  the expenses of the insurer were up by 10.25 per cent Y-o-Y to Rs 11,125.01 crore. However, the loss in the Air India crash dragged the underwriting losses to Rs 1,756 crore, up from Rs 1,588 crore in Q1FY25.

 

The combined ratio of the insurer slipped marginally to 116.16 per cent from 116.13 per cent in the same period last year. The incurred claim ratio stood at 99.76 per cent as opposed to 95.98 per cent. 

 

The company plans to focus on strengthening profitability, with a strong emphasis on launching innovative products aimed at the retail and micro, small and medium enterprise (MSME) segments.

 

During the post-earnings analyst call, the management said it aspires to achieve a 3 per cent lower combined ratio, targeting around 113 per cent in FY26.

 

The market share of the general insurer also increased to 15.51 per cent in Q1FY26 from 14.65 per cent in Q1FY25, according to General Insurance Council data.

 

“The healthy growth rate in domestic business was despite lower growth in motor vehicles, where we have taken a more cautious approach considering the current competitive intensity. The combined ratio at 116.16 per cent was stable compared to the same period last year. The unfortunate incident involving the Air India flight had an adverse impact on the underwriting results. The health segment witnessed a slightly higher loss ratio, and some large losses impacted the liability and miscellaneous portfolio as well. Some more provisions were made towards legacy non-moving balances, which were offset by a healthy investment income,” said Girija Subramanian, chairperson and managing director, New India Assurance.