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Kolkata , Sept. 5

NATIONAL Insurance Co Ltd (NIC) hopes to become the nation's number one general insurance company by the end of the current financial year, according to its Chairman and Managing Director, Mr H.S. Wadhwa.

Addressing a press conference here, he said that for the year ended March 31, 2003, NIC had registered a 21 per cent growth in domestic premium income against 11 per cent in the previous year. Premium income increased from Rs 2,365 crore to Rs 2,870 crore.

"Our premium income growth rate is the highest among the four public sector insurance companies. The average growth rate of these organisations is only 12 per cent. We are already number three by last year's result. By the end of the first quarter of 2003-04 we have become number two, and we hope to become number one by the end of 2003-04," Mr Wadhwa said.

In 2002-03, NIC registered a net profit of Rs 134.91 crore against a net loss of Rs 90.45 crore in 2001-02. It has declared a dividend of 25 per cent on its share capital base of Rs 100 crore. The company has reduced its operational expenses through cost control mechanisms and it came down to 20.9 per cent of the gross premium earnings. However, the permissible limit is only 19.5 per cent. Mr Wadhwa is confident of reducing it below this limit.

"We have reduced the management expense ratio on two accounts. First, we have cut down our actual expenses. Second, as the premium has increased the ratio has become healthier," he said.

NIC was successful in reducing the incurred claims ratio from 95 per cent in 2001-02 to 76.01 per cent in 2002-03. In the current fiscal it is expected to come down to 70 per cent. However, it suffered a huge claim outgo of 176 per cent in the TPA (third party administration) health insurance business.

While the premium income on this account was Rs 441 crore, the claims outgo was Rs 775 crore. In the motor insurance business, outgo on account of claims drawn on own damage was 53 per cent (premium income - Rs 906 crore, claims - Rs 481 crore).

"We have created separate settlement cells in all our regional and divisional offices for the motor third party insurance claims," the Chairman said. The investment income of NIC increased from Rs 439.76 crore to Rs 485.88 crore. The total investment corpus has increased to Rs 3,669.75 crore from Rs 3,524.84 crore.

For the current financial year, NIC's annual premium income target is Rs 3,300 crore. Mr Wadhwa sounded optimistic of crossing the target. It is focusing on the personal segment of the insurance business.

In 2002-03, it earned a premium income of Rs 584 crore from this segment and the target for the current fiscal is Rs 800 crore. It would also increase its number of agents from 60,000 to 80,000. Meanwhile, NIC company has tied up with eight banks for the bancassurance and it expects Rs 400-500-crore premium income from it in 2003-04..

Last year, NIC closed down its loss-making Hong Kong office but has continued with the Kathmandu operations as it is making profits. Similar to its tie-up with Maruti, the company has entered into a new agreement with Eicher Motors for their light commercial vehicles.

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