Financial Year 2012-13 (27 MB) - The New India Assurance Co. Ltd.

Leadership and BeyondPREVAILING ECONOMIC CONDITIONS VIS-À-VIS PERFORMANCE OF GENERAL INSURANCE INDUSTRYIndian economy in the year 11-12 and 12-13 has grown slower when compared with 2009-10 & 10-11. The GDP,at factor cost at 2004-05 prices grew at 6.2 % in 2011-12 and 5 % in 2012-13 ( advanced estimate). The slowdownin 2011-12 and 2012-13 has been precipitated by domestic factors as well as factors emanating from the rest ofthe world, particularly advanced economies and India’s major trading partners. The crisis in the Euro-zone areaand slow growth in many other advanced economies have affected growth in India through dynamic linkages Asper the First Revised Estimates released by the CSO, gross domestic savings as a ratio of GDP at current marketprices (savings rate) declined from 34.0 per cent in 2010-11 to 30.8 per cent in 2011-12. This decline is primarilyaccounted for by a reduction in savings of the public sector and a reduction in financial savings by households.Domestic savings is an important driver of Insurance business.The General Insurance Industry, in 2012-13 was largely insulated from the slowness in economy and grew at 19%. Both international & domestic markets were free from significant catastrophes and acts of god perils andtherefore , better results are expected in across the Industry in 2012-13. The growth in General insurance businesswas largely contributed by increasing disposable incomes, upward mobility of middle & lower middle classes,increase in commodity prices and spreading network in Tier II, III, IV & rural markets . This trend is expected tocontinue in 13-14 as well.III.OVERVIEW OF COMPANY’S OPERATIONSA. INDIAN OPERATIONS :Gross direct premium in India has increased from `8542.86 crore in 2011-12 to `10037.96 crore in 2012-13recording a growth of 17.50% during 2012-13. The growth is observed in all geographical segments as wellas all classes of business.INDIAN OPERATIONAL RESULTSSr.NoPARTICULARS 2012-13 2011-12` in crore` % ` %1 Gross premium 10037.96 17.50 8542.86 20.372 Net premium 8102.02 16.45 6957.29 21.683 Increase in unexpired risk reserve 625.90 - 748.53 -4 Net earned premium 7707.62 - 6469.66 -5 Commission 343.62 4.46 502.87 7.776 Incurred claims 6664.40 86.46 5608.86 86.697 Management expenses 2226.27 28.88 1941.19 30.008 Other income (net of outgo) 61.11 0.79 110.65 1.719 U/W (loss) (1839.96) (23.87) (1570.64) (24.28)10 Investment income 2667.35 34.61 2234.44 34.5411 Profit before tax (PBT) 882.41 11.45 761.83 10.07Note : Percentage shown in sr. no. 1 & 2 indicates the growth over previous year and the percentage shownin sr. no. 5 to 11 is percentage to 'Net Earned Premium.'ANNUAL REPORT31