New India Assurance Co. reported a 61.3 percent year-on-year (YoY) increase in the September quarter (Q2) net profit at Rs 529.97 crore due to a reduction in underwriting loss. This was a stark departure from peers in the industry, who have seen a dip in profits due to rise in flood and crop related insurance losses.

New India’s incurred claims ratio decreased from 98.51 percent in Q2FY19 to 92.85 percent in Q2FY20. The combined ratio improved from 124.7 percent to 117 percent during the quarter.

A combined ratio below 100 percent means that an insurance company has an underwriting profit. In other words, the premiums collected are proportional to the claims paid in any given period.

Underwriting losses came in at Rs 1,022.07 crore in Q2 compared to a loss of Rs 1,228.66 crore in the year-ago period.

On the other hand, premium growth was also robust. Gross written premium grew by 26.8 percent YoY to Rs 8,249 crore in the second quarter. At the end of September 2019, New India’s market share stood at 14.2 percent.

They have posted these results  despite the company incurring significant losses to its net to the tune of Rs 335 crore during the quarter due to floods in different parts of the country. There is slowdown in motor segment. Provisions towards bad debts and diminution in value of certain equity investments further impacted profitability by Rs 40 crore in the quarter.

Among the business segments, motor, crop, fire, engineering and health posted underwriting loss. However, except the motor segment, the rest saw a reduction in underwriting losses.

In terms of quantum, health insurance underwriting losses were the highest at Rs 450.09 crore in Q2 (down from Rs 506.99 crore loss a year ago), followed by motor at Rs 272.84 crore (up from Rs 259.82 crore in Q2FY19).

Crop losses came down to Rs 77.15 crore in the September quarter compared to Rs 97.42 crore in the year-ago period.

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