State-run general insurer New India Assurance said here on Thursday that its profit rose by 40% to Rs 899 crore in the first six month of the fiscal, driven by growth in investment income. The investment income during the period stood at Rs 2,109 crore as against Rs 1,576 crore last year.
"Growth in investment income was one of the main reasons for increase in profit," Chairman and Managing Director G Srinivasan told reporters on Thursday. The global premium increased 12% to Rs 7,728 crore, while domestic premium grew 14% to Rs 6,428 crore.
Its international business reached Rs 1,300 crore, registering a modest growth of 4% "We are targeting a global premium of Rs 16,300 crore in this year and we are quite confident of achieving this number," Srinivasan said, adding that domestic business is expected to grow at 15% this year.
Underwriting losses for the first six months stood at Rs 1,060 crore, up from Rs 915 crore in the year-ago period. The company received about 2,800 claims for about Rs 200 crore in the recent floods in Jammu & Kashmir and around 800 claims worth Rs 300 crore in the Cyclone Hudhud in Andhra.
"We have been very proactive in speeding up settlement of claims. About 80% of the claims from the J&K floods and 50% of claims from Viskhapatnam have been paid," he said.
Out of claims worth Rs 500 crore arising due to both the natural calamities, the company would get Rs 400 crore from its reinsurers, he said. Srinivasan said the reinsurance cost may increase next year due to the recent J&K and Andhra Pradesh calamities.
"By global standards, these losses are not very high, but certainly reinsurers who pay us these losses would like to have some increase in premium. So, I expect some impact on the reinsurance cost during renewals next year and it will also have the impact on direct pricing as well," he said.
Going forward, he also expects premium rates to harden for fire insurance and corporate health segment.
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