Public sector general insurer United India Insurance has reported a 24 per cent decline in net profit for 2008-09 at Rs 476.05 crore, compared with Rs 631.62 crore a year ago.
The insurer has attributed this decline to a 30 per cent fall in return on investment. United India Chairman and Managing Director G Srinivasan told reporters that the decline in net profit was due to the current economic slowdown which, in turn, has brought down its income from investment to Rs 1,048.56 crore during the last financial year, as against Rs 1,517.65 crore during 2007-08.
Typically, public sector general insurance companies have to deal with underwriting losses but make it up through profit on their investment portfolio. But most general insurers will have to take a hit due to a fall in the equity markets as also due to a rise in yield on government securities.
Total investment in FY09 stood at Rs 8,369 crore (Rs 8,042 crore). However the yield on fund basis fell to 12.25 per cent from 19.79 per cent.
The company reported a 14.39 per cent increase in gross premium income to Rs 4,277.77 crore. The company has set a target of Rs 4,800 crore gross written premium income for FY10. Srinivasan said growth would be driven by its retail business and international markets. The company is likely to foray into international markets.
