National Insurance on Friday said it is taking steps to improve its profitability and hopes to lower underwriting losses progressively in the coming years.

The public sector general insurance company has been in the red for the last five financial years with a net loss of Rs 1674.71 crore in 2021-22. The losses have eroded its capital with the solvency ratio at 0.63 per cent as on March 31, 2022.

“Our plan is to reduce underwriting losses and to start making profits. We have started the process two years back where we are exiting the loss making businesses and there has also been re-pricing of group health,” T. Babu Paul, general manager, National Insurance Company, said on the sidelines of a CII event on Thursday.

The insurer has raised the premium along categories, with motor premium rising in the range of 5 per cent to 12 per cent and health from 5 per cent to 25 per cent.

Flash figures from the General Insurance Council show that National Insurance has clocked a 15.47 per cent growth in gross direct premium underwritten to Rs 15,155.76 crore for the year ending March 2023.

The improvements in business are expected to lead to breakeven in underwriting within three years.

On breakeven it would be able to shore up its solvency ratio, which is below the mandatory requirement of 1.5.

Paul welcomed the decision of the regulator to offer flexibility to insurance companies on management expenses.

Regulator IRDAI has set an overall cap of 30 per cent on management expenses for general and health insurers, removing the earlier limits on different lines of businesses.

The expenses are within the cap for National Insurance, with the insurer having a margin of about 2 per cent.

New business premium falls

Calcutta: The 24 life insurance companies together posted a 12.62 per cent contraction in new business premium for March 2023 with insurance behemoth LIC dragging down the industry performance.

The new business premium in March 2023 was at Rs 52,081.12 crore compared with Rs 59,608.83 crore in March 2022. New business premium for LIC was at Rs 28,716.23 crore, down 32.14 per cent from Rs 42,319.22 crore in March 2022, data from Life Insurance Council shows.

The private players posted a new business premium of Rs 23,364.88 crore in March 2023, up 35.13 per cent from Rs 17,289.61 crore in March 2022.

The private players which had exposure in non-Ulip policies with annual premium above Rs 5 lakh such as ICICI Prudential, Max Life, HDFC Life and SBI Life posted a strong show indicating possible fire sale before the budget announcement to tax income from non-Ulip policies with an aggregate annual premium above Rs 5 lakh issued on or after April 1 came into effect.

While HDFC Life posted a 83.45 per cent growth in new business premium in March 2023, the growth rates for ICICI Prudential, Max Life and SBI Life were 30.77 per cent, 42.59 per cent and 23.14 per cent, respectively.