The New India Assurance Company (NIACL) Q4 04/05 earnings summary

Executive summary

• FY2004-05 gross direct premium reached Rs.5,103.16 crore, up 3.69% YoY; first Indian insurer to cross Rs.5,000 crore in gross direct premium.

• PBT rose 23.15% to Rs.797.88 crore, while PAT fell 31.85% to Rs.402.23 crore, chiefly from additional tax on investment-sale profits.

• Underwriting loss narrowed to Rs.658.57 crore from Rs.678.31 crore; investment income remained key to the positive policyholder surplus and overall profitability.

Financial highlights

• Net premium increased 7.16% to Rs.3,895.11 crore; net premium earned was Rs.3,767.17 crore.

• Net investment income rose to Rs.1,450.73 crore from Rs.1,249.66 crore; investment gains on sales/redemptions supported growth amid a low interest-rate environment.

• Total assets increased to Rs.19,827.19 crore from Rs.17,510.44 crore; investments reached Rs.8,403.56 crore in India, up 6%.

• Dividend totaled Rs.80 crore: Rs.20 crore interim and Rs.60 crore proposed final, equal to Rs.4 per share for the final dividend.

Outlook and guidance

• FY2005-06 domestic gross premium target: Rs.4,700 crore, with targeted accretion of 11.61% against FY2004-05 domestic premium of Rs.4,210.81 crore.

• FY2005-06 overseas premium targets: Rs.1,175 crore gross and Rs.946 crore net, with targeted accretion of 9%.

• Domestic restructuring aims to improve viability; 58 of 93 sanctioned offices had been restructured, with 26 extension counters established to maintain service quality.