New India Assurance registered loss at Rs 421 CR, in it's 90-year history

New India Assurance (NIA) has logged losses for the first time in it's 90-year history. New India Assurance notched a net loss of Rs 421 crore in 2010-11, even after Rs 2,329 crore investment income.

Higher claims in both domestic and international markets, one-time additional provision for wage hike, pension and gratuity of Rs 315 crore and the provision of Rs 456 crore to comply with the capital requirements on third-party motor business plunged the company’s balance sheet into the red. Though earlier, it used to make underwriting losses, the large investment income always ensured that the company was in black.

NIA’s claim ratio has remained at 100 per cent, while the combined ratio has remained at 140 per cent. The company has also provided over Rs 1,000 crore for future claims during the year, as the Irda wants general insurers to make larger provision than what they have been doing thus far. General insurance companies suffering net losses due to the sudden requirement of higher capital on account of third party motor pool has been the overall trend in 2010-11.

Source - financialexpress.com