Release Date: January 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The New India Assurance Co Ltd (NSE:NIACL, Financial) achieved a combined ratio improvement to 116.33, reflecting better management of claims and expenses.
- The company renewed the Rajasthan government health scheme with a 20% increase in per family premium, indicating disciplined pricing strategies.
- Gross written premiums reached INR 32,186 crores, with a net earned premium of INR 26,061 crores, showing strong financial performance.
- The solvency ratio remains robust at 1.90 times, well above the regulatory requirement of 1.50 times.
- The company is expanding its product portfolio and leveraging technology through partnerships with platforms like PhonePe and WhatsApp to enhance customer accessibility.
Negative Points
- Profit after tax declined to INR 641 crores from INR 775 crores due to weaker equity market conditions impacting investment income.
- The incurred claims ratio remains high at 97.37%, indicating ongoing challenges in managing claims.
- The return on equity decreased to 4.01% from 5.08%, reflecting lower profitability.
- General insurance penetration remains low at around 1%, highlighting a vast untapped market.
- The company faces intense competition and pricing pressures, particularly in the group health and motor TP segments, affecting profitability.
Q & A Highlights
Q: Can you share an update on how your partnership with PhonePe and WhatsApp has performed in FY25, especially in terms of sales?
A: The Chief Risk Officer (CRO) responded that the partnership with PhonePe resulted in a 50% sales growth in Q3. As for WhatsApp, the initial focus has been on service, with plans to expand product sales in the future.
Q: Could you provide updates on the performance of the renewed government health scheme in Rajasthan and its alignment with profitability goals?
A: The CRO explained that the company has increased premiums by 30% for the renewed scheme, ensuring it aligns with profitability goals while addressing the needs of the common man.
Q: What were the reasons for the lower investment yield, and what is the outlook for the next quarter?
A: The General Manager stated that the lower yield was primarily due to volatility in the equity market, which affected realizations. The outlook remains uncertain, pending RBI guidance, but actions will be taken to lock in higher yields where possible.
Q: Can you explain the growth in the motor third-party segment and any changes in the portfolio mix?
A: The Deputy General Manager (DGM) explained that growth in the motor third-party segment is driven by increased government awareness and enforcement. The portfolio mix includes a larger share of commercial vehicles, with growth across all segments.
Q: What are the trends in claims ratio in the health segment, and how do you see growth in retail and group segments?
A: The DGM Health reported that retail health grew by 11%, group health by 7%, and government business was down by 6% due to timing. The incurred claims ratio improved, with retail at 88%, group health at 103%, and government at 114%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
