The New India Assurance Company (NIACL) Q4 11/12 earnings summary

Executive summary

• FY12 global gross premium crossed ₹10,000cr for the first time, reaching ₹10,073.88cr, up 22.47% YoY; domestic premium growth was 20.37%.

• Profit after tax was ₹179.31cr versus a ₹421.56cr loss in FY11, while underwriting losses narrowed to ₹2,286.29cr from ₹2,643.45cr.

• Domestic results were profitable before tax at ₹761.83cr; foreign operations recorded a ₹495.63cr net loss before tax amid severe catastrophe claims.

Financial highlights

• Net premium income rose 21.95% to ₹8,771.21cr; net retention was 87.07% versus 87.44% in FY11.

• Profit before tax was ₹156.16cr versus a ₹411.37cr loss; proposed dividend was ₹40cr, or ₹2 per share.

• Total investment income was ₹2,344.42cr versus ₹2,329.99cr; investment portfolio at cost rose to ₹15,769.29cr from ₹13,604.63cr.

• Investment income and other income offset underwriting losses; policyholders’ account deficit improved to ₹779.59cr from ₹1,271.41cr.

Outlook and guidance

• FY13 foreign premium targets: ₹2,525cr gross and ₹1,950cr net, versus FY12 completion of ₹2,098.24cr gross and ₹1,553.02cr net.

• Domestic plans prioritized personal lines, health, motor, corporate accounts and project risks; more than 300 Micro Offices were planned for FY13.

• Domestic fire growth target was 16% and foreign fire growth target 20%; Motor Own Damage loss-ratio target was 50%, down from 59% gross in FY12.

• Growth plans included expanding health volumes while maintaining a balanced portfolio, strengthening underwriting and increasing distribution through online and agency channels.