ANNUAL REPORT 2007-08
As a ratio of net premium the net incurred claims of public sector insurers was 90.43 per cent, higher than 85.22 per cent in the previous year. This ratio varied between 94.05 per cent and 86.62 per cent across the four public sector companies. Increase in this ratio was observed across all four public sector insurers, with higher increase in the ratio in
the case of National Insurance (7.54 percentage points) and New India (6.48 percentage points). The incurred claims ratio of New India increased from 80.34 in 2006-07 to 86.82; United India from 90.26 to 92.75; National from 86.51 to 94.05 and Oriental Insurance from 87.66 to 90.47 per cent. (Statement 30&31)
TABLE 28 INCURRED CLAIMS RATIO
(In Per cent) Total
In case of the private insurers, the net incurred claims increased to Rs.4245.55 crore from Rs.2502.89 crore in 2006- 07. The net incurred claim ratio for the private sector insurers was 72.21 (68.02 in 2006-07). All private insurers reported higher incurred claims ratios as against those in the previous year. As indicated earlier two insurers had commenced operations only in 2007-08. Post de-tariffing, the fire segment has exhibited a higher incurred claims ratio across the industry at 68.69 per cent in 2007-08 (58.52 per cent in 2006-07). Similarly, the motor segment reported a higher ratio at 92.31 per cent (84.69). While marine segment was more or less same as 86.68 per cent (86.52), the Health segment reported a significant decline in the incurred claims ratio to 107 per cent in 2007-08 from 141.02 per cent recorded in 2006-07.
In the case of public sector insurers, the incurred claims ratio was the highest in the Health Segment at 112.36 per cent (157.79 per cent in 2006-07 ); followed by motor and marine segments at 104.76 and 82.68 per cent respectively ( 92.25 and 80.50 in 2006-07.). In 2007-08, United India had the highest net incurred claims ratio at 135.36 per cent and 95.83 per cent in maine segment. Oriental had the highest incurred claims ratio in the fire segment at 95.67 followed by National Insurance at 83.96 per cent. In the case of private sector, the incurred claims ratio was the highest in Marine business at 100.32 per cent (112.57) followed by Health segment at 94.84 per cent (103.42) and Motor segment at 71.95 per cent (64.28).
In 2007-08 among the private insurers, Reliance and IFFCO- Tokio had the highest net incurred claims ratio of 69.54 per cent (74.62) and 66.40 per cent (47.29) respectively for the fire segment. The highest claim ratio in the Marine segment was reported by ICICI Lombard at 175.93 per cent (94.46) followed by Reliance at 117.76 per cent (93.63). In the health segment, HDFC Chubb held the highest incurred claim ratio at 142.46 per cent (87.10), followed by IFFCO-Tokio at 121.14 per cent (152.89) .
Despite underwriting losses, the public sector insurers have reported profits on account of the higher investment income. The total net profits earned by both public and private sector insurers during 2007-08 declined to Rs.2249.31 crore from Rs.3137.10 crore in 2006-07, a decline of 28.30 per cent. Due to higher underwriting losses, the non-life insurers relied on investment income to report profit in the Profit & Loss Account (Shareholders’ account). Except for one insurer each in the public and private sectors, namely Oriental Insurance and HDFC, all insurers have reported increase in the investment income over the previous year. The cumulative investment income of the public and private sector insurers stood at Rs.6247.51 crore and Rs.742.05 crore respectively in 2007- 08 (Rs.5784.23 crore and Rs. 415.04 crore in 2006-07).
In 2007-08, New India reported net profit after tax of Rs.1401.13 crore; United India of Rs.631.32 crore; National of Rs.163.43