The New India Assurance Company Limited

New India Assurance reported a robust 13.11% YoY growth in global gross written premium, reaching Rs.13,333.58 crores in Q1 FY26, outpacing the general insurance industry's growth of 8.84%. This performance led to an increase in the company's market share to 15.51% in Q1 FY26 from 14.65% in the prior year. The company's strategic focus on acquiring premium low-risk policies contributed to this growth, reinforcing its position as a market leader.

The company achieved a substantial 80% increase in net profit after tax, rising to Rs.391 crores in Q1 FY26 from Rs.217 crores in Q1 FY25. This improvement was largely attributable to a significant reduction in the expense ratio, which decreased from 11.65% in Q1 FY25 to 7.86% in Q1 FY26. This reduction was primarily driven by a negative net addition of employees and a lesser impact from pension liabilities.

Despite the positive profitability trends, the net incurred claims ratio increased to 99.76% in Q1 FY26 from 95.98% in Q1 FY25. This rise was mainly due to a significant aviation claim and increases in health and liability claims. The combined ratio remained largely stable at 116.16% in Q1 FY26, compared to 116.13% in Q1 FY25, indicating that the benefits from expense reduction were offset by higher claims.

Following a downgrade to B++ from A-Excellent in 2018, New India Assurance is actively working to regain an A-rated status. Initiatives include improving ERM methods, leveraging technology, and addressing procedural lapses. The company also undertook a 'cleaning of books' exercise in Q1 FY26, writing off old unreconciled amounts, which resulted in a net negative impact of Rs.145.35 crores from provisions for non-moving reinsurance balances and doubtful debts.

The motor segment showed mixed results. The Motor TP incurred claims ratio saw a slight reduction from 111.71% to 105.09% in Q1 FY26, attributed to a changed portfolio mix favoring private cars. However, the Motor OD ICR increased to 116.35% from 114.86%, primarily due to high demands from OEMs/dealers and intense competitive pressure. Management is implementing a dynamic strategy for Motor OD, with expected improvements in the coming quarters^⏳.

The health and PA segment experienced a rise in ICR from 105.96% to 108.98% in Q1 FY26, largely due to medical inflation of 14-15% and the unregulated nature of medical services. Despite pricing hikes and cautious underwriting, claims increased by 3%. Management is enhancing audits (targeting 50% in-house audit for retail and group health) and developing fraud detection tools, aiming to bring down the overall health ICR by year-end.

The fire insurance segment demonstrated strong growth of 19.95% in Q1 FY26. This was attributed to the market returning to discipline from January 2025, after significant pricing discounts (over 90%) observed from May to December in the previous year. The company also acquired new clients, and the reinsurance-driven nature of the business is expected to sustain this growth.