ANNUAL REPORT 2007-08
crore; and Oriental of Rs.9.30 crore. In the case of Oriental, the lower profits were on account of higher incurred claims ratio. Secondly, the company has shown higher expenses of management due to adopting of AS-15 which impacted the profitability.
Amongst the private sector insurers, ICICI Lombard was the sole insurer to declare dividends in 2007-08. The company recommended dividend of Rs.5.91 per share. Though Iffco- Tokio declared dividends in 2005-06 and 2006-07, it did not declare dividends in 2007-08.
Six private insurers reported profits after tax during 2007-08. Two insurers who had reported profits in 2006-07, reported losses in 2007-08. Reliance reported net losses for the first time since commencement of operations in 2000-01 and HDFC which reported profits in 2006-07 and 2005-06, reported net loss of Rs.17 crore in 2007-08. The two non-life insurers who commenced operations in 2007-08 have reported losses of Rs.17.09 crore and Rs. 0.30 crore. The net profits of these six private insurance companies were Rs.243.78 crore as against Rs.229.74 crore reported by eight insurers in 2006- 07. The net loss of the four other private insurers was Rs.199.95 crore.
Star Health and Allied Insurance Co. Ltd.
Star Health was the first company to receive certificate of registration to carry on general insurance business exclusively to underwrite health, personal accident and travel insurance segments. In the year ending March 31, 2008, the company which commenced operations in 2006-07 had underwritten a gross direct premium of Rs.168.19 crore roughly seven times of Rs.22.51 crore in the previous year. The insurer has reported underwriting loss of Rs.5.65 crore (Rs.11.56 crore in 2006- 07). Supplemented by investment income, the insurer reported net profits of Rs.1.28 crore, as against net losses of Rs.2.59 crore in 2006-07.
Returns to the Shareholders
Apollo DKV Health Insurance Co. Ltd.
The four public sector general insurance companies in 2007- 08 have contributed Rs.449.49 crore as against Rs.581.39 crore in 2006-07 to the exchequer as dividends. The lower dividend payments was mainly on account of lower net profits reported by Oriental and National which resulted in lower dividend being declared by Oriental at Rs.0.75 per share in 2007-08 and National at Rs.3.26 per share. While New India reduced the dividend paid marginally, United India recommended a higher dividend at Rs. 12.63 per share.
Apollo DKV is the second company to receive certificate of registration to carry on general insurance business to underwrite exclusively in the health, personal Accident and travel insurance segment. The insurer was granted registration in 2007-08 and is in operation for five months. In the year ending March 31, 2008, the insurer had underwritten gross direct premium of Rs.2.96 crore. The insurer reported underwriting losses of Rs.31.97 crore, and incurred net loss of Rs.28.34 crore for the year.
TABLE 29 DIVIDENDS PAID : NON-LIFE INSURERS (Rs.Crore)
Specialized Institution 125.00 — Re-insurer 309.60 1068.63
General Insurance Corporation
GIC is the sole insurer of the domestic re-insurance market, providing re-insurance to the direct general insurance companies in India. The Corporation’s re-insurance programme has been designed to meet the objectives of optimizing the retention within the country, ensuring adequate coverage for exposure and developing adequate capacities within the domestic market. GIC receives statutory cession of 15 per cent on each and every policy issued by domestic insurers subject to certain limits and leads domestic companies’ treaty programmes and facultative programmes. Prior to this, the statutory cession were 20 per cent in 2006- 07. GIC is also the manager of the Third Party Motor Pool.