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PSU general insurer United India Insurance Company (UII) has reported a decline in its bottomline for 2015-16. This was because of losses from the claims due to catastrophic floods in Chennai, and higher provisioning for wage revision.
The company reported a profit after tax of ₹221 crore in 2015-16, against ₹300 crore in 2014-15, registering a fall of 26 per cent.
“The company set aside about ₹663 crore for wage revision in 2015-16,” said Milind Kharat, UII’s Chairman and Managing Director. For the third year in a row, UII’s performance was impacted by natural catastrophes.
While the Chennai floods caused losses in 2015-16, floods in Uttarakhand and Jammu and Kashmir, and the HudHud cyclone impacted performance in the previous years.
The Chennai floods in November-December 2015 caused a total damage of ₹5,000 crore for insurance companies. Of this, UII received 7,480 claims worth ₹1,413 crore. Kharat said over 98 per cent of the claims have been settled.
But the impact on its balance sheet was only about ₹140 crore as the company recovered most of the money through reinsurance.
Claims ratioAfter absorbing the losses, it posted a claims ratio of 87.81 per cent, up from 84.42 per cent in the previous year.
Its gross premium income grew strongly at ₹ 12,250 crore when compared with ₹10,692 crore, an increase of 14.58 per cent, which is higher than the industry growth of 13.7 per cent. Its health insurance segment grew 30 per cent, while the motor category was up 13 per cent. The combined ratio (a measure of insurer profitability) of UII stood at 122, against 120 per cent in 2014-15.
For 2016-17, the company plans to achieve 17 per cent growth in premium income at ₹ 14,444 crore.
UII has introduced a new package policy called UNI MSME Protect, which will cover fire material damage, burglary, public liability and money insurance.
The insurer is building a new 15-storey building on its existing land to house its headquarters with an investment outlay of ₹250 crore. This is expected to be ready in two years.
It is also in the process of hiring about 300 people to support its expansion plans.
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