Mumbai: Kolkata-based state-owned National Insurance Co. (NIC) is all set to launch its initial public offering (IPO) by the end of the current fiscal year, a top company official said on Wednesday.
“We are waiting for approvals from the government to come out with the IPO which may happen by the end-fiscal," chairman and managing director Sanath Kumar said. “We would approach the government for the IPO, preferably in this fiscal itself, now that our capital position is comfortable," he said.
After a long time the company has achieved a solvency margin of 1.9, much above the regulatory requirement of 1.5, Kumar said. Despite this, the general insurer reported a net profit of Rs49 crore for fiscal 2017, massively down from Rs151 crore in the previous fiscal and Kumar blamed it on higher provisioning towards liabilities.
Kumar attributed the higher solvency margin at 1.9 from 1.26 a year ago, to the reduction in exposure to loss- making group health cover, re-pricing of health and motor products as well as lower subordinate debt.
Total premium for FY17 rose 18.83% to Rs14,283 crore, he said, adding “We are looking at achieving Rs16,000 crore premium in the current fiscal year."
The company’s networth rose 9% to Rs9,544 crore from Rs8,764 crore a year ago, while combined ratio stood at 133.7%, and the underwriting loss remained almost at flat at Rs3,680 crore against Rs3,633 crore a year ago.
On liabilities, Kumar said NIC is likely to absorb liabilities worth Rs2,776 crore this year, adding the claim ratio has come down to 85.98% from 90.53% a year ago. Even though the Pradhan Mantri Suraksha Bima Yojana continues to be loss-making with a claim ratio of 160%, Kumar said the company still wants to continue with the scheme as it’s a customer accretion scheme.
The company will increase the number of agents to 50,000 this year from 45,000 now. On the crop insurance scheme, he said NIC has already sold premia worth Rs840 crore and is looking at achieving Rs2,000 crore this fiscal.