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Thanks to a 400 basis point drop in operating expenses, United India Insurance Co has posted 21 per cent growth in net profit at Rs 192 crore for the quarter ended June 30, 2012 against Rs 159 crore in the comparable previous year quarter.
Premium income grew by 20 per cent to Rs 2,428 crore during the quarter from Rs 2,022 crore last year.
The company has been posting over 20 per cent growth year-on-year for the last four years in a row, and “it is poised to close the current financial year with a premium income of over Rs 10,000 crore,” G. Srinivasan, Chairman and Managing Director, said.
The company’s profitability was driven predominantly by the fall in operating expenses from 24.22 per cent of net earned premium to 20.26 per cent during the quarter, he highlighted.
It registered a net earned premium income of Rs 1,832 crore during the period under consideration from Rs 1,440 crore in the corresponding previous year period, growth of 27.22 per cent.
Income from fixed investment and dividend went up to Rs 277 crore (Rs 222 crore). However, there was a drop in profit on sale of equity to Rs 102 crore from Rs 162 crore last year.
Srinivasan said as the company enjoys a more than adequate solvency ratio of 2.84 (as against the regulatory requirement of 1.20) it is not in need of any additional capital.
To keep up its growth momentum, besides enabling online renewal of motor, health and personal accident policies, the company has launched on-line portals facilitating e-issuance of these policies, including burglary and marine policies.
It also plans to launch on-line policies for shopkeepers and householders.
In addition, it proposes to launch an information and transactional kiosk across tier II and tier III towns.
“We are also in talks with a few banks to share their ATM infrastructure to double as insurance kiosks,” he said.
While its major thrust will be on retail portfolio, the insurance company will focus strategically on micro, small and medium enterprises and rural segments in a big way.
It is in the process of opening about 300 micro offices in Tier III towns and would increase its agency force to 75,000 from the current 50,000 during the year, said Srinivasan.
>ravikumar.ramanujam@thehindu.co.in
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