Despite tough market conditions, private players Reliance General Insurance and Universal Sompo have reported their maiden net profit for the last fiscal on better investment income and core income.
While the 6-year-old Reliance GI posted maiden net profit of Rs 64.1 crore in 2013-14 against a net loss of 92.8 crore in 2012-13, Universal Sompo, which began operations five years ago, logged in net profit of Rs 11 crore in FY14. "Gross premium collection of Reliance General rose about 20% in FY14 to Rs 2,442 crore, which was one of the highest growth rates in the industry," its chief executive Rakesh Jain told PTI. Its premium growth was highest among the top 10 industry players, he added. He said: "Growth has been quite diversified with focus on new segments like health, weather and liability insurance.
Efficient strategy and improved agency productivity contributed to the profitable growth in FY14. We expect the high growth rate to continue in this fiscal with a focus on the bottom line."
Reliance General has a market share of 7.5% in terms of gross written premium among the private players. "Return on investment was 8% and this is expected to significantly improve going forward as the earlier losses were on account of third-party motor pool was fully taken into consideration in FY14," Jain said. The company sold nearly 37 lakh policies during the year with a 27% rise on a year-on-year basis.
At the end of March 2014, the investment book stood at Rs 3,843 crore and increase of 18% over the last fiscal. Another private sector player which has turned profitable on completion of five years of its operation is Universal Sompo General Insurance. Even though the company incurred an underwriting loss of Rs 65 crore in FY14, it was investment income of Rs 74 crore which drove profitability.
Universal Sompo is a joint venture between Allahabad Bank, Indian Overseas Bank, Karnataka Bank, Dabur Investments and Sompo Insurance Inc of Japan. "We have garnered a net profit of Rs 11 crore in FY14 and now we are looking at closing the current fiscal with a net profit of Rs 35 crore," Universal executive chairman O N Singh said over the weekend here after signing an agreement with Dena Bank for sale of its loan secure policy to the bank's retail and SME customers.
"Universal Sompo closed the year 2013-14 with a GWP of Rs 600 crore and we are looking at Rs 750 crore this fiscal", Singh said, adding that the solvency margin of the company currently stands at 1.91.
Universal Sompo, which has got 93 products, has a market share of 0.7%. "We are eyeing to achieve market share of 1 percent within next couple of years", Singh said, adding that bancassurance is the main channel to contribute to business currently with 50% of our total portfolio.