The New India Assurance Company Ltd. makes a corporate announcement

On the consolidated FY24 basis, NIACL’s combined ratio worsened to 120.75% from 117.08% in FY23, with both claims and the implied expense component increasing. Net investment income covered 91.55% of the FY24 underwriting deficit, but left a residual operating shortfall before other shareholder-account items, non-operating expenses and tax.

Combined-ratio breakdown

Source: audited consolidated annual results; figures converted from the reported lakh basis ^[1]. Notes: † Implied expense component = combined ratio minus incurred claims ratio. The separately reported expenses-of-management ratio was 21.03% in FY24 versus 19.43% in FY23; it is not the full expense loading embedded in the combined ratio ^[1].

Investment-income offset and PAT bridge

• FY24 underwriting loss was Rs 7,190.43 Cr, versus Rs 5,290.59 Cr in FY23 ^[1].
• Net investment income was Rs 6,583.15 Cr in FY24, versus Rs 7,493.24 Cr in FY23 ^[1].
• Derived offset: Rs 6,583.15 Cr / Rs 7,190.43 Cr = 91.55% of the FY24 underwriting deficit.
• The residual after this simple underwriting-to-investment bridge was Rs 607.28 Cr, matching the reported operating loss of Rs 607.28 Cr before the subsequent shareholder-account and non-operating items ^[1].
• Thereafter, shareholder-account income of Rs 2,156.55 Cr, non-operating expenses of Rs 744.44 Cr, and tax of Rs 320.98 Cr resulted in reported consolidated PAT of Rs 1,091.12 Cr ^[1].

Interpretation: FY24 PAT was therefore investment-supported rather than underwriting-led. Investment income substantially absorbed the core insurance deficit, but did not fully eliminate it; the positive PAT also depended on the subsequent shareholder-account and non-operating income statement items.

As of March 31, 2024, NIACL’s solvency ratio was 1.81x, versus the regulatory requirement of 1.50x. This represents a 0.31x cushion, or approximately 20.67% above the minimum. The company reported the ratio as healthy despite the impact of catastrophic claims during FY24. ^[2]

The comparative solvency-margin data shows:

• Available Solvency Margin (ASM): Rs 1,845.66 Crores, derived from Rs 18,45,659 Lakhs.
• Required Solvency Margin (RSM): Rs 1,020.70 Crores, derived from Rs 10,20,695 Lakhs.
• ASM/RSM: 1.81x. ^[3]

Using the 1.50x regulatory threshold, the implied minimum available capital was approximately Rs 1,531.04 Crores. Therefore, the reported ASM provided an estimated Rs 314.62 Crores of capital above the regulatory minimum. This is derived from ASM of Rs 1,845.66 Crores less 1.50 times RSM of Rs 1,020.70 Crores. ^[3]

Claims-provisioning impact

The cushion was not unaffected by claims. Management attributed approximately Rs 794 Crores of net incurred-claims impact to catastrophic events during FY24. ^[2] In an earlier FY24 discussion, management explicitly stated that increased catastrophic claims were the predominant factor dragging down solvency, while maintaining an internal objective of keeping the ratio above 2.00x. ^[4]

Accordingly, the 1.81x ratio should be interpreted as post-claims-impact reported solvency capital, not as a pre-provision capital position. It remained comfortably above the 1.50x regulatory floor, but was below management’s internal target of above 2.00x. The disclosures do not provide a counterfactual solvency ratio excluding the claims provisioning, so the precise reduction attributable to provisioning cannot be quantified.

FY24 industry mix shifted toward Health, while Motor’s share was broadly stable. Health including PA and Travel rose to about 40.30% of industry GDPI in FY24, versus a derived 38.02% in FY23, a gain of roughly 2.27 percentage points. Motor was approximately 31.68% in FY24, versus a derived 31.64% in FY23, effectively flat. Health therefore expanded its lead over Motor. The comparison uses GDPI rather than strict GWP, since GWP also includes inward reinsurance premium. ^{[5] [6] [7]}

Notes: † Derived from reported segment GDPI and total industry GDPI. Motor FY23 premium is back-solved from FY24 premium of Rs 917.81 billion and 12.9% growth. The General Insurance Council-referenced industry data reported total GDPI of Rs 2,897.38 billion in FY24, with Motor at Rs 917.81 billion. ^[6]

Loss-ratio comparison

For ICICI Lombard, the FY24 loss ratios were:

• Motor: 65.20%, down from 72.40% in FY23.
• Health: 81.40%, marginally lower than 81.50% in FY23.
• Health’s loss ratio was therefore 16.20 pp higher than Motor’s in FY24. ^[8]

A numeric comparison with broader industry-average loss ratios cannot be made from the cited General Insurance Council data: the reported industry extract provides GDPI, segment growth and product mix, but does not report comparable industry Motor and Health loss-ratio averages. ^[6] The 87.90% Motor and 86.59% Health ratios reported for GIC Re’s domestic book are company-specific reinsurance-portfolio figures, not industry averages. ^[9]

Implication: FY24 industry premium momentum was more Health-led than Motor-led, but ICICI Lombard’s underwriting experience was materially better in Motor than in Health. The industry benchmark needed to establish whether that outperformance was relative to the market is not reported in the cited GI Council data.

_Scope note: this comparison also included The New India Assurance Company Ltd. (NIACL), which the answer above does not cover. Ask about any of them for a full side-by-side._