After the initial public offer plans of GIC Re and New India Assurance, Kolkata-based state-owned National Insurance Company (NIC) is all set to launch its initial public offering (IPO) by the end of the current fiscal year. “We are waiting for approvals from the government to come out with the IPO which may happen by the end-fiscal,” NIC chairman and managing director Sanath Kumar said. “We would approach the government for the IPO, preferably in this fiscal itself, now that our capital position is comfortable,” he said.
After a long time the company has achieved a solvency margin of 1.9, much above the regulatory requirement of 1.5, Kumar said. Despite this, the general insurer reported a net profit of Rs 49 crore for fiscal 2017, massively down from Rs 151 crore in the previous fiscal and Kumar blamed it on higher provisioning towards liabilities.
Kumar attributed the higher solvency margin at 1.9 from 1.26 a year ago, to the reduction in exposure to loss-making group health cover, re-pricing of health and motor products as well as lower subordinate debt. Total premium for FY17 rose 18.83 per cent to Rs 14,283 crore, he said, adding “We are looking at achieving Rs 16,000 crore premium in the current fiscal year.”
The company’s networth rose 9 per cent to Rs 9,544 crore from Rs 8,764 crore a year ago, while combined ratio stood at 133.7 per cent, and the underwriting loss remained almost at flat at Rs 3,680 crore against Rs 3,633 crore a year ago.
On liabilities, Kumar said NIC is likely to absorb liabilities worth Rs 2,776 crore this year, adding the claim ratio has come down to 85.98 per cent from 90.53 per cent a year ago.
Even though the Pradhan Mantri Suraksha Bima Yojana continues to be loss-making with a claim ratio of 160 per cent, Kumar said the company still wants to continue with the scheme as it’s a customer accretion scheme. The company will increase the number of agents to 50,000 this year from 45,000 now.
On the crop insurance scheme, he said NIC has already sold premia worth Rs 840 crore and is looking at achieving Rs 2,000 crore this fiscal.