Financial Daily from THE HINDU group of publications
Wednesday, Oct 02, 2002
Financial Daily from THE HINDU group of publications Wednesday, Oct 02, 2002 |
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General Insurance Underwriting losses of PSU insurance cos surge — Gujarat riots, third-party claims blamed Our Bureau
MUMBAI, Oct. 1 GENERAL Insurance Corporation of India and its four associates had a combined underwriting losses of Rs 2,529 crore for the year 2001-02 as against Rs 1,722 crore in the previous year. The losses were mainly due to large number of claims on account of third party motor insurance and the Gujarat riots, according to Mr P.C.Ghosh, Managing Director and current in-charge, General Insurance Corporation of India. The insurance companies have received claims worth Rs 150 crore on account of loses arising out of the riots. He said there was an increase in the motor insurance tariff in July and this was expected to result in a additional premium income of Rs 700 crore. In the current year also, the overall claim experience was not expected to improve because of continuing underwriting losses especially in motor portfolio, he said. He said in spite of the rise in investment income, Oriental Insurance Company Ltd and National Insurance Company Ltd had suffered overall losses. Gross domestic premium income of GIC and its associates had gone up by 20.2 per cent to Rs 12,120 crore from Rs 10,080 crore in the previous year. The rate of growth was significant considering the five per cent growth last year and the entry of seven new private players in the market. Announcing the performance of GIC here today, Mr Ghosh said the corporation has earned a lower profit of Rs 306.70 crore for the year as against Rs 400.64 crore in the previous year. The corporation earned a net premium income of Rs 2,671.24 crore (Rs 2,186 crore) in the previous year. GIC's own underwriting losses were Rs 517.41 crore (Rs 334.89 crore). GIC's investment income rose to Rs 961.80 crore from Rs 873.40 crore in the previous year. This is despite the falling interest rates and declining yields. Of its investments, 60 per cent was in debt and 26 per cent in equity. The corporation is not keen on continuing direct lending to projects. Mr Ghosh said with the delinking of the subsidiaries, GIC has now become an exclusive Indian reinsurer catering to the needs of all private and public sector insurance companies. GIC would shortly offer reinsurance of life policies. A cell had already been set up to develop this business separately, he said. GIC will be expanding its international presence. In addition to the existing offices in UK and Russia, a new overseas office will be opened in Dubai soon. The corporation will also be leveraging the strength of its subsidiaries in Singapore and Kenya.
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