The New India Assurance Company (NIACL) Q4 07/08 earnings summary

Executive summary

• FY2007-08 global gross premium reached ₹6,151.46 crore, up 3.62% YoY; net premium was ₹4,914.28 crore, up 3.42%.

• Profit before tax was ₹1,521.46 crore and profit after tax ₹1,401.13 crore, both lower YoY; underwriting deficit widened to ₹844.39 crore.

• Investment income of ₹2,344.62 crore supported earnings, while lower operating expenses partly offset sharply higher claims.

Financial highlights

• Global gross premium ₹6,151.46 crore vs ₹5,936.78 crore; global net premium ₹4,914.28 crore vs ₹4,751.76 crore.

• PBT ₹1,521.46 crore vs ₹1,613.93 crore; PAT ₹1,401.13 crore vs ₹1,459.95 crore.

• Net incurred claims rose to ₹4,177.48 crore from ₹3,643.61 crore; operating expenses fell to ₹1,019.10 crore from ₹1,153.89 crore.

• Investment income was ₹2,344.62 crore vs ₹2,251.35 crore; policyholder revenue-account surplus declined to ₹509.38 crore from ₹736.72 crore.

• Proposed dividend ₹283 crore, or ₹14.15/share, vs ₹292 crore, or ₹14.60/share; transfer to reserves ₹1,070.03 crore.

Outlook and guidance

• FY2008-09 domestic gross direct premium target: ₹5,700 crore, representing targeted growth of 8%.

• Foreign premium objectives for FY2008-09: ₹1,257 crore gross and ₹1,000 crore net, vs FY2007-08 actuals of ₹1,143.63 crore and ₹932.07 crore.

• Health and retail were expected to support domestic growth through demand, rate increases, customized products and expanded distribution; reduced property rates were expected to stabilize or improve.

• Detariffing in Fire, Engineering and Motor Own Damage was expected to pressure premium growth; expansion of Project New Energy initiatives was planned across regions over 18 months.