A sharp reduction in claims ratio, a healthy growth in premium turnover, focus on retail, MSME and rural insurance segments, a significant drop in underwriting losses and a decline in operating expenses have helped United India Insurance Company to register a sharp rise in its profitability. The company has reported a 56.6 per cent rise in its net profit for the half-year ended September 30, 2011, at Rs. 341.07 crore against Rs. 218 crore in the same period in the previous year.
Addressing presspersons here on Thursday, G. Srinivasan, Chairman-cum-Managing Director, said the company maintained the momentum of business growth in the last three years. It could reduce the claims ratio to 82.93 per cent during the half-year under reference from 86.02 per cent, which resulted in the combined ratio (a measure of the profitability of insurance operations) dropping to 114 per cent from 126.43 per cent during the year-ago period, Mr. Srinivasan said.
The Operating expenses were lower at Rs. 723 crore against Rs. 787 crore. The premium turnover rose by Rs. 855 crore (27 per cent) to Rs. 4,033 crore from Rs. 3,178 core. Mr. Srinivasan was optimistic that the company would comfortably cross the Rs. 8,000-core mark during the current financial year, registering a growth rate of 25 per cent over the previous fiscal.
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The company continued to enjoy strong fundamentals with a solvency ratio of 2.87 (size of capital relative to premium written) against a regulatory norm of 1.50.
The focus for future growth would be on retail segment, which was expanding in a big way, Mr. Srinivasan said.