New India Assurance hikes mediclaim rates by 25%

New Delhi: State-run New India Assurance has hiked the premium on its mediclaim policy by up to 25 percent, a newspaper report said on Friday.

New India Assurance has increased premium on health insurance by an average of 25 percent for individuals, a Times Of India report said.

The company has done away with the rate differential based on region and introduced a uniform rate across the country, the TOI report further said.

New India Assurance has reported a net profit at Rs 1,008 crore in fiscal 2017, up 22 percent over the previous year, driven by investment income which whittled down the high underwriting losses.

The largest non-life insurer also set around 17 percent growth in total premium (global premium) income at Rs 26,000 crore in fiscal 2018 from Rs 22,279 crore it achieved in fiscal 2017, which was a 21.27 percent growth over the previous year.

In the reporting year, the state-run company, which has 16 percent market share and is bound for an public float later this fiscal year, had a domestic premium income of Rs 19,115 crore, a growth of 27.17 percent from Rs 15,115 crore a year before.

Sharing the numbers, New India Assurance chairman and managing director S Srinivasan said this is the second best net income for the company after the Rs 1,200 crore it had reported in fiscal 2015.

He said the company has suffered an underwriting losses to the tune of Rs 3,500 crore primarily due to three big fire incidents in the year as well as the Chennai and Wardha cyclones. In fiscal 2016, its underwriting losses stood at a low Rs 3,100 crore. The three fire incidents alone cost the insurer a whopping Rs 1,200 crore in the year, he added.

New India also suffered 100 percent claim ratio from new crop insurance business, whose premia touched Rs 1,050 crore and plans to increase it to Rs 1,500 crore this year.

The company could still manage better profit due to a spike in the investment income which rose to Rs 4,050 crore from Rs 3,953 crore, Srinivasan said, adding its assets rose to Rs 53,000 crore from Rs 45,000 crore while the networth jumped to Rs 34,764 crore from Rs 28,895 crore.

Srinivasan said during the year, the company has hired 10,000 agents and will hire 12,000 this year. He also said going forward the company will focus on digital sales, which currently contribute 14 percent of sales.

Since we started offering 10 percent discount to new policy sales, there was a 60 percent spike in volumes, he said, adding currently as much as 65 percent sales are done by brokers, followed by around 20 percent by agents and 3 percent through the banccasurance channels.

Srinivasan also said the company will soon be roping in three more big banks for this model of channel sales, but refused to name them saying an announcement in this regard will be made a day or two. Already it has tied up with Bank of India and Citi.

On asked about the PIL seeking banning insurers from investing in tobacco companies like ITC, in which it owns 1.5 percent for the past several decades, Srinivasan said, they are a commercial entity and rules should be applicable to all uniformly.

On the proposed IPO, he said it will happen this financial year itself. "It should be happening within the next six to eight months," he said and refused to speak more on the topic.

With PTI Inputs