New India Assurance April-Dec profit rises 36% to Rs 701 cr

MUMBAI: Government owned New India Assurance has reported a 35% rise in net profit to Rs 701 crore for nine months ending December 2013 against 517 crore in corresponding period boosted by a healthy growth in domestic business.

Announcing the results, G Srinivasan, chairman, New India Assurance said “We are targeting a net profit of Rs 1000 crore for the current financial year.”

A rise in motor and health insurance has helped the country’s largest non-life company to post a 16% growth in domestic premium. As a result the share of retail in the company’s total portfolio has risen to 65% and corporate business is now only 35%.

“Although auto sales have slowed down our premium income has grown. This is because we generate renewal premium in addition to premium from new policies,” said Srinivasan.

Driven by retail, global premium of the company grew by 15% to touch Rs 10255 crores while the Indian business increased by 16% to reach Rs 8337 crores.

He said that the company has managed to increase productivity by redeploying staff in over 700 micro offices during the current fiscal. The micro offices are low cost operations in small towns with a computer and connectivity to the company’s servers and manned up a couple of employees. “In some of the micro offices we have seen business of as much as Rs 2 crore and we have upgraded them into branches,” said Srinivasan. The micro offices were part of the government initiative to increase insurance penetration by getting companies to open branches in centres where they have no presence.

“Retail business is steady and in terms of claims ratio is slightly better than corporate business. To increase our presence in retail we are adding another 20,000 agents during the current financial year,” said Srinivasan.