CHENNAI: United India Insurance on Tuesday said it expected a growth rate of 10-12 per cent in premium income for the financial year 2017-18, below the industry average of 15 per cent, as the company is in the process of shedding unprofitable businesses under its group health insurance scheme.
The company said it saw a growth of 8.8 per cent in premium income this year.
The State-run insurer, which turned around to posting a profit after tax of Rs1,003 crore this year from a loss of Rs1,914 crore in the year-ago period, said it had lost Rs800 crore worth of business under group health insurance schemes to evade cutthroat competition from online players and NBFCs that have been undercutting prices to corporates.
“Group health insurance schemes are usually tailor-made policies. They are cost to the corporates. Rather than providing more discounts in the premium payable to manage competition, we choose to come out of certain businesses under the umbrella and focus on retail health insurance instead,” said MN Sarma, Chairman and Managing Director, United India Insurance Company Ltd.
“Instead, we are in the process of ramping up new products under health insurance. We are looking to launch Rs75 lakh and Rs1 crore cover with benefits in the first half of the year. With regard to property insurance, we are developing products like title insurance and insurance on defective property for builders according to the RERA mandate,” Sarma added.
The State-run insurance company had also posted a 6.9 per cent rise in net premium income helped by higher demand for motor vehicle, health and crop insurance in India.
United India also said its claims ratio on motor vehicle insurance had improved to 90 per cent, while health insurance inflated to 111 per cent last year.
The company also said it had nearly halved its underwriting losses to Rs2,524 crore in 2017-18, from Rs4,444 crore the year earlier. The insurer said it had achieved a solvency ratio of 1.54 as against 1.15 posted last year, thereby meeting Insurance Regulatory and Development Authority of India’s mandate for insurers to maintain a 1.5 solvency margin at all times.