The New India Assurance Company (NIACL) Q4 02/03 earnings summary

Executive summary

• FY 2002-03 gross direct premium rose 14.64% to Rs 4,812.79 crore, while profit after tax increased to Rs 255.81 crore from Rs 142.00 crore.

• Underwriting remained loss-making at Rs 490.26 crore, but improved from Rs 533.71 crore; investment income supported overall profitability.

Financial highlights

• Net premium increased 14.61% to Rs 3,516.43 crore; gross direct premium exceeded the Rs 4,555 crore target.

• Profit before tax was Rs 312.82 crore versus Rs 208.19 crore; profit after tax was Rs 255.81 crore versus Rs 142.00 crore.

• EPS rose to Rs 25.58 from Rs 14.20; proposed dividend increased to 40%, or Rs 4 per share, from 20%.

• Investment income totaled Rs 762.14 crore versus Rs 752.02 crore; policyholder allocation was Rs 466.17 crore and shareholder allocation Rs 295.97 crore.

Outlook and guidance

• FY 2003-04 premium targets: domestic Rs 4,100 crore; foreign Rs 935 crore gross and Rs 891 crore net, with targeted net accretion of 4.87%.

• Management expected domestic agricultural recovery and GDP growth to support the outlook; forecast GDP growth was 6.5% for FY 2003-04.

• Motor loss-control measures, more prudent commercial motor underwriting and revised tariffs were expected to support further improvement in claims experience.