State-owned general insurer New India Assurance Company reported a net loss of ₹1,267 crore for the September quarter. In the same period a year earlier, it had made a net profit of ₹63 crore.
The company said its underwriting losses grew as claims turned out worse than expected in property, motor and health insurance.
Premium growth slows
Gross written premium, the total premium collected before certain deductions, rose 5.14% from a year earlier. It came in at ₹11,083 crore, compared with ₹10,541 crore in the corresponding quarter last year.
Management attributed the modest growth mainly to a steep fall in property insurance rates.
“A challenging quarter”
Lavanya R Mundayur, chairman and managing director, described the quarter as one of the most difficult for the company in recent times. She noted that it followed another quarter that had been equally tough for the whole industry.
Mundayur said the property segment also posted heavy underwriting losses. The company pointed to several large-risk losses, along with flood claims in Gujarat, north India and northeast India.
What the numbers mean
Underwriting losses arise when an insurer pays out more in claims and related costs than it earns from premiums on the policies it writes. A widening of such losses, combined with weak premium growth, left New India Assurance with a deep quarterly loss.
The company’s results show how pressure on pricing in property cover, coupled with natural disasters and big-ticket claims, can quickly weigh on an insurer’s performance. Motor and health insurance, two of the largest segments for general insurers, also contributed to the adverse claims experience during the quarter.
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