The Hindu Business Line : Mumbai floods: PSU general insurers may take Rs 2,300-cr hit

Mr Rajendra Beri (left), Chairman & Managing Director, New India Assurance Co Ltd, and Mr A.V. Muralidharan, Director & General Manager, at a press conference to announce the company's financial results for 2004-05, in Mumbai on Saturday. - Shashi Ashiwal

Mumbai , Sept. 10

THE four public sector general insurance companies can face losses of around Rs 2,300 crore on account of claims arising out of the Mumbai floods, according to figures released by the New India Assurance Company.

New India Assurance estimates its losses at Rs 600 crore. However, only 5-7 per cent of this will be borne on the company's balance sheet as the rest was reinsured, said Mr Rajendra Beri, Chairman-cum-Managing Director, New India Assurance. The company has received 16,000 claims post the Mumbai floods, of which it has settled 4,782 claims amounting to Rs 44.5 crore.

New India net dips: New India Assurance announced its annual results for 2004-05, where its profit after tax fell to Rs 402 crore from Rs 590 crore a year ago. However, the company's profit before tax rose to Rs 797 crore from Rs 647 crore during the same period. The fall in net profit was mainly on account of a Rs 293-crore tax provision for the current year and the Rs 150.5 crore that was provided as tax for the earlier years.

The total income for the year grew to Rs 821 crore from Rs 597 crore in 2003-04.

Claims high: The company received 20,556 claims which account for almost two-thirds of the industry figure of 37,313. The total claims incurred amounted to Rs 2,904 crore.

In terms of gross global premium, New India Assurance crossed Rs 5,000 crore which is the highest among all the non-life insurance companies in the country. The gross premium outside India during the period contributed Rs 892 crore.

The company registered an increase of 4.08 per cent in the domestic market and 1.89 per cent in the international market. The net premium of the company, after reinsurance acceptances and cessions, also showed an accretion of 7.16 per cent from Rs 3,634 crore to Rs 3,895 crore.

The underwriting results of the company have marginally improved to Rs 658.57 crore from Rs 678.3 crore. According to Mr Beri, the underwriting losses were mainly due to the claims from the motor portfolio. While the total premium from motor insurance amounted to Rs 1,818 crore, the claims accounted for Rs 1,731 crore.

Third-party claims: The disparity is more acute in terms of third-party motor insurance. While the premium from third-party motor insurance accounted for Rs 641 crore, the claims amounted to Rs 1,195 crore.

In terms of the health insurance portfolio, the premium received by the company totalled Rs 513 crore and the claims amounted to Rs 535 crore.

New India Assurance also paid an interim dividend of Rs 20 core at 20 per cent of the original paid-up capital of Rs 100 crore and a final dividend of Rs 60 crore at 40 per cent of the Rs 150 crore enhanced capital.

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Mumbai floods: PSU general insurers may take Rs 2,300-cr hit