New India''s net profit soars by 78.1 per cent

29 August 2006

According to B Chakrabarti, chairman and managing director, New India Assurance, the company - facing growing competition from private general insurers - plans to expand its operations in the Gulf region.

New India, like other general insurers, will be facing new challenges over the coming months, in the detariffication era. "We are formulating various strategies to take into account the new scenario," said Chakrabarti.

The Insurance Regulatory and Development Authority(IRDA) is overseeing the changeover to a 'detariffied' regime, where general insurance companies would be able to decide on the premiums, depending on several factors. Premiums will vary across different customer segments.

New India, according to Chakrabarti, is already in talks with transporters associations to sort out problems in the auto insurance segment in the 'detariffied' era. The company has earned Rs2,200 crore by way of auto insurance premium, but had an average claims ratio of 181 per cent.

Higher exposure to the motor insurance business has,however, resulted in sharp fall in underwriting profit, which has tumbled from Rs232.78 crore in 2004-05, to Rs36.03 crore in the following fiscal.

New India Assurance earned health insurance premium of Rs700 crore, and the average claims ratio was 110 per cent. Health insurance is growing at 35 per cent (compounded annual growth rate), and New India Assurance plans to launch new products, catering to the mid- and low-income segments, and also for rural markets.