The slowdown in automobile sales had a ruboff effect on motor vehicle insurance premium , with public sector insurer New India Assurance Co registering a 6 per cent decline in motor vehicle insurance in Q1 of FY20.

“The motor vehicle insurance market was not buoyant as vehicles sales were down. But we managed to grow in other branches of business, such as fire, marine, aviation, and engineering, posting a 16 per cent growth in the first quarter,” said Atul Sahai, Chairman and Managing Director, New India Assurance.

He hoped that there will be a turnaround in automobile sales in the next three months.

Sahai, who was in Kochi for the Regional Managers’ conference, said that FY19 was a challenging for New India Assurance with multiple catastrophe events affecting both the Indian and foreign operations. The overall impact of these events was roughly about ₹740 crore. On the domestic front, he said, the company was impacted by poor climatic conditions that led to claim estimates being revised higher, coupled with refund of some premium due to area correction factor computation. The company aligned the method of computation of URR (unexpected risk reverse) for foreign business with that of the Indian business which led to a further hit of about ₹175 crore. The investment income was impacted by about ₹116 crore due to write-offs/provisions made during the year, he said.

With a market share of 14 per cent, New India Assurance in FY19 registered a net profit of ₹580 crore, while the global gross written premium stood at ₹28,017 crore. The investments continue to show accretion with assets under management at ₹69,074 crore. The solvency ratio at 2.13 per cent remains higher than the IRDAI mandated ratio of 1.5 per cent.

To a question, Sahai said the Budget announcement of 100 per cent FDI in insurance intermediaries is a positive proposal, which would bring best international practices into the insurance sector.

Kerala deluge and claims

S Preetha, Chief Regional Manager, Kerala region, said that claims worth ₹580 crore have been paid to the victims of Kerala floods. However, the net payment of claims will be around ₹140 crore as it had reassured the assets. Cochin International Airport and Kochi Metro Rail are the major claimants.

The company has garnered an insurance premium of ₹1,262 crore in FY19 from the State and there has been encouraging response for insuring buildings after the deluge, she said.

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