Cholamandalam MS General Insurance Company Ltd, a 60:40 joint venture between Murugappa Group and Japan’s Mitsui Sumitomo Insurance Group (Japan), has posted a net profit of ₹100 crore for the quarter ended December 31, 2023, compared with ₹43 crore in the year-ago period, amid the impact of catastrophic events in incurred claims.

The profit before tax zoomed to ₹134 crore from ₹58 crore. The company’s gross written premium (including reinsurance inward) grew to ₹1,875 crore in December 2023 against ₹1,637 crore in the December 2022 quarter, an increase of 14 per cent. This is higher than the industry growth of 11 per cent.

However, the solvency ratio slightly declined from 2.06 per cent to 1.79 per cent, indicating a need for careful risk management.

In terms of segmental performance, the motor segment remained the largest contributor with gross written premium (GWP) from the segment growing to ₹1,261 crore when compared with ₹1,202 crore in Q3FY23. The fire segment also recorded growth with GWP growing from ₹139 crore to ₹155 crore. The personal accident segment’s GWP grew to ₹86 crore from ₹80 crore.

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In the total business mix, the motor segment accounts for about 64 per cent, while commercial and health account for 12.6 per cent and 10.2 per cent respectively. With its re-entry, crop segment accounted for 7 per cent. The share of health is likely to come down to 60 per cent in the coming months, if the company sees traction in other categories.

Vision ahead

“We have done well during the 9 months of this fiscal. The industry is growing at 14-15 per cent and we would want to grow at 24-25 per cent. Our return on net worth is closer to 16 per cent. We are on course to record our highest-ever annual profit in this fiscal,” V Suryanarayanan, Managing Director of the company said during an interaction.

For the 9 months of this fiscal, the company’s PAT more than doubled to ₹264 crore when compared with ₹116 crore in the same period the previous year. Gross written premium (including reinsurance inward) stood at ₹5,578 crore against ₹4,424 crore, an increase of 26 per cent.

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He said the company was investing in technology with a two-fold strategy and had engaged Boston Consulting Group for the same.

Firstly, the company’s operations are shifting from a legacy ERP to a cloud-based architecture starting with the private car segment, which will be effective this year, and then to other motor categories, health, fire, and commercial products. “We have been working on this for the last 12-15 months and over the next 12 months, we should be able to complete it,” he said.

The other part of the technology upgradation is about data analytics and enabling our staff and distribution partners to transact in digital mode.

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