Oriental Insurance FY06 net dips 14%

The country's second largest general insurer Oriental Insurance Company today said its net profit for the year ended March 2006 declined 14 per cent on account of settlements following last year's floods in Mumbai and underwriting losses. Net profit declined to Rs 284 crore in 2005-06 from Rs 330 crore in 2004-05.

The fall in net profit was due to underwriting loss of Rs 750 crore as the company witnessed higher claims in health and motor business, besides settlements of claims by victims of last year's floods in Mumbai.

But the loss was offset by a profit of Rs 1,100 crore from investments in equity, mutual funds and bonds, CMD M Ramadoss said.

He said the company in this current financial year targets 10 per cent growth in premium income to Rs 3,900 crore and 5 per cent growth in net profit to Rs 300 crore.

"We have set a target of Rs 3,900 crore gross premium for 2006-07, but we are hopeful of crossing Rs 4,000 crore, up from Rs 3,610 crore in 2005-06," Ramadoss said.

The company plans to expand its overseas operation by adding two more branches in West Asia. The three overseas branches of the insurer "� in Kuwait, Dubai and Nepal "� have made profits of Rs 18 crore.

The insurer expects premium collection from the country to go up to Rs 3,884.87 crore in 2006-07 and overseas operatations to contribute around Rs 92 crore.

Ramdoss said the company has identified the thrust areas such as aviation, oil & energy and liability business for premium growth. The company further announced a dividend of Rs 50 crore to the central government.