Capitaline

Results 24-May-22

Analysis

New India Assurance Company

Performance hit by high employee expenses and losses in foreign operations

The New India Assurance Company has posted the net loss of Rs 552.40 crore in the quarter ended March 2022 (Q4FY2022). Gross Direct Premium declined 1% to Rs 9004.11 crore in Q4FY2022.

The company has posted operating loss of Rs 945.52 crore in Q4FY2022 as against net loss of Rs 130.43 crore in Q4FY2021. The segment such has health, marine and motor have posted operating losses, while segments such as fire, crop and miscellaneous have recorded operating profits in Q4FY2022.

Combined Ratio jumped on sequential basis to 122.6%, while adjusted combined ratio surged to 111.97% from 102.67% in Q4FY2022.

The solvency ratio eased to 1.66x end March 2022.

The book value of the company including fair value change account stood at Rs 156.6 per share and excluding fair value change account stood at Rs 112.0 per share end March 2022.

Commenting on the results, Madhulika Bhaskar, General Manager, said, "For the period ended 31st March 2022, gross direct premium income in India grew by 14.08% vis-a-vis the industry growth of 11.03%. The growth rate was higher than the industry, and the company increased its market share to 14.75%. The profitability for the year was severely affected due to COVID claims, with the company settling about 3760 Cr worth of COVID claims during the year.

In the 4th quarter, one-time initial provisions towards employee benefits liability on account of SVRS and sick leave totalling 121 crore negatively affected the domestic results. The foreign business suffered a severe setback because of additional provisions required in the UK operations due to unprecedented inflation, and some adverse claim development on large losses in the Dubai operations, which together had a negative impact of about 160 crore. The investment income for the quarter was lower as the market conditions were not very favourable. With the COVID situation improving, we look forward to improved performance in the coming quarters”

Statement of Revenue Accounts: New India Assurance
	2203 (3)	2103 (3)	Var %	2203 (12)	2103 (12)	Var %
1. Premiums earned (Net)	7296.37	6991.89	4	29064.70	26376.33	10
2. Profit on sale of Investments (Net)	836.24	1535.09	-46	4693.94	4335.78	8
4. Others	0.00	73.31	-	0.00	73.31	-
Total (A)	8132.61	8600.29	-5	33758.64	30785.42	10

1. Claims Incurred (Net)	7247.82	6821.78	6	28832.00	22156.76	30
2. Commission	678.05	626.98	8	2313.02	2483.86	-7
3. Operating Expenses related to Insurance Business	1152.26	1281.96	-10	4069.87	5427.23	-25
4. Premium Deficiency	0.00	0.00	0	0.00	0.00	0
Total Expenses (B)	9078.14	8730.73	4	35214.90	30067.86	17

Operating Profit/ Loss C=(A -B)	-945.52	-130.43	625	-1456.25	717.57	PL
(a) Fire Insurance	49.23	183.18	-73	517.40	201.93	156
(b) Marine Insurance	-59.00	-2.16	2631	48.09	50.28	-4
(c) Health	-1126.92	-775.12	45	-4855.72	-1469.72	230
(d) Crop	131.47	-179.46	LP	214.29	-296.74	LP
(e) Motor	-164.03	307.94	PL	1776.61	1960.06	-9
(c) Miscellaneous Insurance	223.75	335.20	-33	843.07	271.75	210
APPROPRIATIONS
Transfer to Shareholders` Account	-945.52	-130.43	625	-1456.25	717.57	-
Transfer to Other Reserves	0	0		0	0

Statement of Profit & Loss Account: New India Assurance
	2203 (3)	2103 (3)	Var %	2203 (12)	2103 (12)	Var %
1. Transfer from policyholders fund	-945.52	-130.43	625	-1456.25	717.57	PL
2. Income from investments	371.58	668.87	-44	2012.09	1979.35	2
3. Other income	59.01	13.28	344	94.98	29.40	223
Total (A)	-514.93	551.72	-193	650.82	2726.32	-76

4. Provisions (Other than taxation)	16.88	13.62	24	21.13	128.62	-84
5. Other expenses	138.53	213.73	-35	452.08	537.94	-16

Total (B)	155.41	227.35	-32	473.21	666.56	-29

Profit before tax	-670.34	324.37	-307	177.61	2059.76	-91
Provision for taxation:	-120.54	84.44	-243	-0.31	432.01	-100
PAT	-549.80	239.93	-329	177.92	1627.75	-89
Profit attributable to non-controlling interest	-2.00	-2.01	0	3.86	4.74	-19
Share of profit /Loss from associates	-4.60	-8.98	-49	20.51	17.46	17
Net Profit attributable to owners	-552.40	232.96	-337	194.57	1640.47	-88
EPS (Rs) *	-13.41	5.65		1.18	9.95
* on current equity of Rs 824 crore of face value of Rs 5 each, Figures in crore, Source: Capitaline Corporate Database

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