Profitability of some non-life insurance companies got eroded, among other reasons, owing to higher claims on health portfolios in the quarter ended June 30.
ICICI Lombard General Insurance Co, India’s biggest private sector non-life insurance company, reported a 13 per cent drop in its net profit to Rs 33 crore in the three months to June 30, compared with Rs 38 crore in the same period a year earlier.
The claim ratio in ICICI Lombard’s health portfolio was around 100 per cent. This is despite an increase in premium income during the quarter by 27 per cent to Rs 1,118 crore from Rs 878 crore in the first quarter of the last financial year.
Likewise, Reliance General Insurance posted a loss of Rs 39 crore in the first quarter as against a profit of Rs 1 crore a year earlier. The shareholders have infused Rs 95 crore in the first quarter of this year.
“The company incurred losses this quarter on account of high claims from its health portfolio,” the company said. Therefore, the insurer had re-priced its health portfolio and also significantly reduced its exposure to the unprofitable group mediclaim.
Still, other insurers such as Bajaj Allianz General Insurance and Tata AIG General Insurance Company registered an increase in their respective profit. Profit before tax for Tata AIG stood at Rs 12 crore as against a loss of Rs 17.5 crore in April-June 2009.
Bajaj reported Rs 31 crore profit in the first quarter compared with Rs 27 crore during the first quarter last year. Though the claim ratio for Bajaj Allianz under group mediclaim stood at 100 per cent at the end of the quarter, it managed to report a rise in profit because of their in-house third party administrator and a lower claim ratio under retail health segment.
