Public sector general insurer National Insurance Company Ltd (NIC) is aiming at a return to profit in the current 2024-25 fiscal, after incurring losses for nearly a decade, an official said on Saturday.
The company is expecting Rs 100-200 crore profit this year, NIC Executive Director T Babu Paul said.
The Kolkata-based insurer anticipates a slight increase in policy tariffs due to rising medical treatment costs. Paul highlighted that the company managed to reduce its losses significantly, narrowing them to Rs 187 crore in FY 2024 from a staggering Rs 3,865 crore the previous year. “We aim to achieve a net profit of Rs 100-200 crore, provided there are no major disruptions in the upcoming quarters,” Paul stated during the 6th edition of the Insurance Leader Meet & Excellence Awards organized by Assocham.
Paul attributed the company’s turnaround to its efforts in eliminating unprofitable insurance products and implementing cost-saving strategies. NIC has restructured its motor insurance and bulk health insurance offerings, focusing more on retail policies.
In the health insurance sector, retail policies make up about one-third of the total Rs 7,000 crore premium, while retail motor insurance constitutes nearly two-thirds of the Rs 5,000 crore premium from that segment.
“Currently, health and motor insurance represent 80 percent of our portfolio. Over the next three years, we plan to decrease this reliance to 70 percent by expanding our offerings in other insurance areas such as fire and home insurance,” Paul said.
Regarding health policy tariffs, Paul noted a rise in medical treatment costs by 5-20 percent. To address this, an industry-wide tariff revision is anticipated this year. “Our average claim amount has increased to Rs 41,000 from Rs 27,000 in the past 4-5 years,” he explained. “We are considering a selective tariff increase, likely in single digits, subject to regulatory approval.”
Inderjeet Singh, Secretary General of the General Insurance Council, mentioned that both the government and the insurance industry are committed to achieving ‘Insurance for All by 2047’.
