New India Assurance Company Ltd (NSE: NIACL) Q1 2026 Earnings Call dated Jul. 30, 2025
Corporate Participants:
Unidentified Speaker
Girija Subramanian — Managing Director and Chairman
Mary Abraham — General Manager
Analysts:
Unidentified Participant
Rehan Saiyyed — Analyst
Aditi Joshi — Analyst
Shobhit Sharma — Analyst
Nidhesh Jain — Analyst
Presentation:
operator
Welcome to the conference of the new India Assurance Company Limited arranged by Concept Investor Relation to discuss its Q1FY26 results. We have with us today Mrs. Girija Subramaniam, Chairmanaging Director, Mrs. Meeta Srivastava, Executive Director. Mrs. Kasturi Sengupta, Executive Director, General Managers and Chief Financial officer among other SGM management members. @ this point all participant lines will be in the listen only mode. Later we will conduct a question and answer session. At that time, if you have a question, please press charn1 on your touchdown telephone. Please note this conference is being recorded. I would now like to hand the floor over to Mrs.
Girija Subramaniam, chairman cum Managing Director. Thank you. And over to you, Ma’am.
Girija Subramanian — Managing Director and Chairman
Good afternoon everyone. I am Girijaya Subramanian, Chairman cum Managing Director of the New India Assurance Company Limited I welcome you all to discuss Q1FY16 financial and operational performance of the New India Assurance Company Limited. I am joined today by Mrs. Smitha Srivastava, Executive Director, Mrs. Kasturi Sengupta, Executive Director, General Manager, Chief Financial Officer and other management members. At the outset, I would like to extend a warm welcome and express my sincere appreciation to all of you for joining us this afternoon. I would also like to thank our shareholders, investors and analyst community for your continued trust and confidence in New India Assurance.
Your steadfast support is instrumental in driving our progress and strengthening our commitment to sustainable growth. Before delving into our financial and operational performance for the first quarter FY26, I will begin with a brief overview about our company. Following that, we will open the floor for for the question and answer session where my team and I will be happy to address your questions and provide any necessary clarifications. As we gather here today, New India Assurance stands at a pivotal juncture reflecting on a legacy of over a century of serving the nation while simultaneously charting an ambitious course for the future.
Our journey has been defined by resilience, adaptability and an unwavering commitment to our policyholders, stakeholders and the broader Indian economy. We are a 16 year old insurance company conceptualized by Sir Doravji Tata in 1919 and nationalized in the year 1973. We have a pan India presence with 1,668 offices across the country and presence in 25 countries as the largest non life insurer in India in terms of gross direct premium, we remain committed to delivering excellence through prudent underwriting, superior claim service and customer centric innovations. In the past quarter, despite a dynamic and often challenging global and domestic landscape, New India Assurance have demonstrated robust performance reinforcing our position as a leader in the Indian general insurance sector.
Our strategic initiatives, prudent underwriting practices and customer centric approach have yielded commendable results which we are eager to share with you in detail. Today, the general insurance industry stands at 79301.21 crores as of June 25, reflecting a year on year growth of 8.84% as per the General Insurance Council’s data of this, New India assurance has underwritten Rs. 12,299.49 crores accounting for approximately 15.51% of the total gross direct premium underwritten which represents a robust 15.27% year on year growth. Business Highlights the distribution mix stands at direction 33.228% agency 21.73% banker 0.54% dealer 5.65% broker 38.80% product mix stands as follows health and PA 50.19% motor TP 10.61% motor OD 10.65% marine 2.51% fire 17.04% crop 0.94% and others at 8.06% in Q1FY26 ratings agency CRISIL has reaffirmed its CRISIL AAA stable rating which is considered to have the highest degree of safety for your company.
Furthermore, AM Best has assigned the India National Scale rating of AAA in Exceptional and has affirmed the Financial strength rating of B good and a long term issuer credit rating of BB good to the New India Assurance Co. Ltd. The outlook of these credit ratings is stable. New India Assurance Company Limited has consistently upheld the vital balance between sustainable growth and and robust profitability, recognizing it as fundamental to organizational resilience. Our operational ethos ensures that each underwritten policy is thoroughly risk assessed directly enhancing shareholder value. Consequently, we have made the deliberate choice to opt out of corporate accounts lacking revenue accretion, instead compensating with the strategic acquisition of premium low risk policies.
The positive outcome of these concerted efforts are demonstrably evident in our first quarter FY26 performance. As we sail below financial performance, the gross direct premium income Indian business stood at 12,299.49 crores in Q1FY26 as compared to rupees 10,670.47 crores in in Q1FY25, the gross direct premium global stands at 13,333.58 crores in Q1FY26, as compared to 11,787.92 crores in Q1FY25. Net premiums earned reported at Rs. 9369.42 crores in Q1FY26 as compared to Rs. 8503 crores in Q1FY25. Net worth stands at Rs. 22,279 crores in Q1FY26as compared to Rs. 21,343 crores in Q1FY25. Net profit after tax stands at Rs.
391 crores in Q1FY26As compared to rupees 217 crores in in Q1FY 25. Now coming to the important ratios for Q1FY26 net incurred claims ratio is at 99.76% commission ratio 8.754% of net return premium as compared to 8.49% in Q1FY25 expense ratio 7.86% of net written premium as compared to 11.65% in Q1FY25 combined ratio 116.16% compared to 116.13% in Q1FY25 solvency ratio 1.87 times compared to 1.83 times in Q1FY25 return on equity ratio is at 7.17%. With this, I come to the conclusion of my opening remarks and invite our General Manager of Finance Mary Abraham to provide a detailed overview of our financial performance.
Mary Abraham — General Manager
Thank you ma’. Good afternoon and I will just quickly take you through the financial performance of the company for quarter 125 26. Next slide please. So we had a gross written premium of 13333.58 crores as compared to quarter one of the previous year of 11787.92 which is a growth rate of 13.11% year on year. Our net incurred claim ICR percent has increased from 95.98% to 99.76% in this quarter and mainly because of the aviation claim, the Air India claim that we had and also due to an Increase in health and liability claims. The operating expenses you will see as a percentage of the net written premium has come down from 11.65% to 7.86%.
A significant reduction mainly driven by the negative net addition of employees. And the combined ratio despite the increase in the ICR percent has remained stable at 116.16% as compared to the previous year of 116.13%. The other incomes you will see we have the other expenses of 145.35 crores mainly due to the provision that we made towards the non moving reinsurance balances and also providing for the other doubtful debts. This was an attempt to clean the books and as per our board approved policy. So the financial results are that we have a profit after tax of 391crores which is an 80% increase over the PAT of quarter one for the financial year 2425.
Next slide please. Yeah, this slide just captures the key highlights by way of a bar chart. You have the combined ratio where we’ve remained almost stable and you also. And as compared to 2425 also. Yeah, we have kind of remained stable but compared to 2324 we have significantly come down the gross written premium. Oh, okay. Oh sorry. Yeah, I will just read out the figures as well. The combined ratio for quarter 12526 is 116.16% as compared to the combined ratio for the previous year which stood at 116. So we have remained stable as far as the combined ratio is concerned.
As far as the gross written premium is concerned. As already mentioned we have a total premium of 13,334,334 crores in quarter one FY 2526 is compared to 11,787 crores in quarter one financial year 2425 and this was at a growth rate of 13.11%. The investment income has increased in quarter one 2526. It is 2,290 crores as compared to the investment income for the previous year which was 1852 crores. The profit after tax is 3, 391 crores for quarter 12526 which is an 80% growth over the profit after tax of the previous year of quarter one of the previous year which was 217 crores.
To continuing with the other ratios, our solvency ratio is 1.87 times for quarter 12526 as compared to the previous year which was 1.83 times which is a significant increase. Our Asset under management stood at. 1 lakh 1, 802 crores for the quarter 12526 as compared to 98,769 crores for quarter 124 25. The technical reserve has increased to 55,789 crores in quarter 12526 as compared to 51,638 crores in quarter 1 for the year 24 25. So this just indicates the reserves that we have for our investment. Please go back to the previous slide please. Our net worth has increased from 21,343 crores to 22,279 crores in quarter 1 2526. Fair value change account has come down from 26,360 crores to rupees 23,416 crores. Mainly due to the volatility in the equity market.
And our return on equity is 7.17% for quarter 12526 as compared to 4.15% for quarter 124 25. Next slide please. Next we come to the segment wise performance for FHIR department. The quarter one figures are 2,272 crores registering a growth of 19.95% as compared to the previous year’s quarter. Marine Premium stood at 300 crores as compared to 274 crores in the last year’s first quarter registering a growth of 9.48%. Motor OD premium is 1270 crores in the current quarter registering a growth of 6.45% over quarter one of last year. Motor TP premium is 1415 crores registering a growth of 3.18% as compared to the premium of quarter one of last year.
Health and PA put together is a premium of 6692 crores registering a growth of 14.15% over the premium of quarter one of last Year. Crop premium is 126 crores with a growth rate of 0.8%. It almost remained the same as last year. And others which comprises the other departments like Engineering, Aviation, Miscellaneous liability put together had a premium of 1258 crores registering a growth of 16.8% as compared to that of quarter one for the year 2425 and coming.
operator
Looks like we have the management line disconnected. Please stay connected until we have the management line reconnected again. We have the management line reconnected.
Girija Subramanian — Managing Director and Chairman
Hello.
Mary Abraham — General Manager
Am I audible?
operator
Yes, ma’. Please go ahead.
Mary Abraham — General Manager
Yes. So I’ve completed the premium segment wise I will take you through the incurred claims ratio Segment wise for FHIR, the incurred claims ratio stood at 11.44% as compared to 7.75% of the previous year. Quarter one of the previous year. Marine the ICR is 59.88% as compared to 55.86% in quarter one of the previous year. Motor OD, the ICR is 116.35% as compared to the previous year’s quarter one figures of 114.86%. MotorTP ICR is 105.09% as compared to quarter one figures of the previous year of 111.71. It has come down Health and PA has an ICR of 108.98% as compared to the previous Year’s figure of 105.96.
Croft registered an ICR of 94.23% as compared to 72.26% in quarter one 2425 and the other departments as mentioned earlier had an ICR percent of 89.20% as compared to 50.79% pertaining to quarter one of financial year 24 25. The main increase due to the overall ICR has increased mainly due to the aviation loss and some large losses in liability and miscellaneous portfolio. Motor TP loss ratio continues to remain high though it has shown a small reduction and we have still not received any notification on the TP premium increase from mod. Health segment also witnessed an increase in the income in the incurred claim ratio.
Next slide. We now take you through the performance of New India vis a vis the performance of the industry. The general insurance industry grew by 8.84% in quarter one FY26 with a premium of 79301.21 crores and this was at a growth of 8.84% whereas new India grew at 13.33% with a premium of 12299point.
Unidentified Speaker
Domestic is.
Mary Abraham — General Manager
Oh sorry, sorry, sorry. I’m extremely sorry. New India had a premium of 12,299.49 crores at a growth rate of 15.27%. The market share of New India increased to 15.51% from 14.65% of the same period last year. We take you through the segment wise market share of New India. For FHIR our market share was 16.5% where we had a premium of 1857.16 crores as compared to the total market premium of 11241.76 crores. For Marine the market share was 16.2% with a premium of 280.68 crores as compared to the total Market premium of 1737.15 crores. For Motor our market share was 9.92 crores with a premium of 9.92% with a premium of 2302.1 crores as compared to the total MARKET premium of 23200.28 crores.
For Health and PA our market share was 18.9% with a premium of 6713.35 crores as compared to the total KEEP premium of 35543.33 crores and all the other miscellaneous departments like Crop Credit and other miscellaneous liabilities. Our market share stood at 15.3% with a premium of 559.97 crores as compared to the market premium of 3658.06 crores and all other departments put together, our market share was 15% with a premium of 586.23 crores compared to the market premium of 3920.63 crores. The company had in the past taken a conscious decision not to write Crop line of business directly.
A few other facts about our company we are in the 107th year of our operation having celebrated our Foundation Day on the 23rd of July this year. We are market leader with a strong brand image. We have been rated AAA by Crisil and B Good by AM Best. We have a multi channel distribution network and we are an Indian multinational with presence in 25 countries including India. We have 1665 offices in India underlining strong domestic presence. Our segment Mix fire accounts for 17.04%, health NPA accounts for 50.19%, motor TP is 10.61%, motor OD is 10.65%, marine is 2.51%, crop is 0.94% and others at 8.06%.
8.06%? Yeah. Then the next is on the distribution mix Brokers the agents account for 21.73% of our business. Brokers account for 38.8% of our business. Direct premium is 33.28%. From dealers the percentage is 5.65% and bank assurance accounts for 0.54%. Our key initiatives for the year 2526 are launching innovative new products with focus on retail and MSME growing new lines like Parametric insurance Emphasis on growth in segments other than motor and health where competitive intensity is high. Special efforts to drive insurance penetration in the state of Gujarat and Lakshadweep under the state insurance plan. Further impetus on risk management initiatives and enterprise risk management and taking steps to improve our global credit rating.
Key initiatives are Call center We have call center offering key IT initiatives are call centers offering services in seven regional languages. We have a revamped website. Our WhatsApp services are available in eight regional languages which offer policy and claim related services. AI and ML enabled chatbot for customer service Claim automation Efforts continue for faster claim settlement Customer portal offering a seamless user experience for standard products. Thank you. The presentation is over.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask the question may press star and one on the touchdown telephone. If you wish to remove yourself from the question queue you may press star and do. Participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question is from the line of Rehan Syed from Netra Asset Managers. Please go ahead.
Rehan Saiyyed
Good afternoon and thank you for giving me the opportunity. And I think my has cleared all the points in my opening remarks. I have left with some of the questions. So first question is on the global. Side like will you share more on. Your credit inflating improvement strategy and how global trading agency are responding towards that going forward? What is the recent trending to the industry?
Girija Subramanian
Excuse me, we are not clear what you asked. Can you repeat please?
Rehan Saiyyed
Sure, sure. I am asking. I wanted. Could you share more on your category improvement status?
operator
Sorry to interrupt. Mr. Rehan, may I request you use a headphone? Can you try to use the speakerphone now?
Rehan Saiyyed
Am I audible? Hello. Hello.
operator
Yes, yes, please go ahead.
Rehan Saiyyed
Yeah, so my first question is around could you share on your more on the credit rating improvement strategy and how global trading agencies are respond. Just could you please put more light on that?
Girija Subramanian
Yeah. Yes. So actually on this credit rating we have been credit rated by AM Best for quite some time now. And unfortunately in the year 2018 we were downgraded to B from A. Excellent. And since then we have been working consistently to see that we go up back to our A rated status. And in that endeavor we have been consistently trying to improve our erm. Methods, the technology usage, the kind of resilience across all parameters. Risk management initiatives. We have employment of technology to ensure that there are no gaps. All of this we have been trying to do across the last Few years and most particularly in the last year, we have made some significant strides in this area.
We have put certain on wherever we’ve had audit observations and audit paras from our statutory auditors, we have actually put risk, our teams task force to address each of these unreconciled amounts. And as a result of that, you can see that the last quarter and this quarter we have taken a few of the unreconciled amounts, which are pretty old, very old balances to our, you know, we have written them off and so that we clean up the books, you know, permanently for the future. At the same time, to be future ready and to ensure that such things do not repeat, we have created certain verticals within the company to address these procedural lapses so that, you know, these, because of the transactional inconsistencies and delay, these things were happening.
And therefore we have put addressed all those gaps. We expect that this will, you know, be a total cleanup for the future and we will not see these kind of instances in the future. Apart from that, we have strengthened our ERM team. We have, you know, completely drawn up a risk map, heat map which was there. We have improved on it. We have taken the help of one of the big three in ensuring that we get the absolute state of art knowledge transfer, the best practices in the industry for addressing this, to make erm, best in class for this industry.
And I think there has been a significant improvement from there. We have adopted technology in a big way to ensure that these gaps which were there in the procedures and processes they addressed to a large extent. And we have seen significant improvement in the way our teams have reacted to this, the way these processes have cleaned up and made more, brought more accountability to the table of each and every employee. The way we are able to measure TAT when it comes to claim settlement or in fact even for underwriting, they are able to find out where and on which table the delay is happening.
And these things I think are something which are permanent in qualitative terms. And this would bring continual, you know, continual rewards for this company every quarter that we go.
Rehan Saiyyed
Okay, okay, I’m well understand and thank you for such little answer. And my second and last question is around like what’s the outlook for combined ratio in half a second half by 25th? Any interval target or levers to improve? Is there any target in the management team we have forecasting for second half FY26 and FY27?
Girija Subramanian
Yes. So last year we had a phenomenal year when we brought down the combined ratio from 119 to 116, which is not a mean feat to achieve for such a big entity, a global entity. So it was definitely something we really worked on in the last year and we brought in significant change. The same things hold good this year. Additionally, this first quarter hasn’t moved in terms of combined ratio because there were few large losses that affected this particular quarter and the one from Air India was a once in a while kind of loss and otherwise possibly we could have seen attraction there also.
But going forward and I think the kind of initiatives we are taking, we are very, very sure that internally we have set ourselves improvement in combined ratio by another 3% this year, which I think should be achievable at the current point of time.
Rehan Saiyyed
Okay. Okay, ma’, am, thank you. That’s it from us and good luck for the coming quarter.
Girija Subramanian
Thank you.
operator
Thank you. The next question is from the line of Aditi Joshi from JP Morgan. Please go ahead.
Aditi Joshi
Yeah, thanks for taking my question. Just on the loss ratio side, just now you said that it could have the first quarter could have been better if was not the case with the Air India losses. But if I look at the incurred loss ratio across the business line, it has, you know, broadly shot up in almost every category. So just firstly with respect to the health insurance actually wanted to understand what is your outlook for the rest of the year especially given that we have taken some pricing hike and also cautious underwriting approach in that segment and also in the motor insurance side now that the third party premium hike has not come.
So what is your outlook for the motor TP loss ratio as well? And if you’re able to guide your total group level loss ratio for the rest of the year that will be helpful.
Girija Subramanian
Yes, this quarter as you rightly said you the fire loss ratio has, I mean 11.44 is pretty low and I think this is, this is a natural case when we new risk then you have different exposures here and you can say that this quarter it has gone up but then that is still not very alarming when it comes to marine it is just a 4% increase. The major ones are I think in health, as you rightly said, from 105 to 108. And mainly this has happened because of medical inflation which is currently at 14%, 14, 15%.
And as we have been telling to all agencies across the year that a large part of the medical insurance service that we give our policyholders is unregulated, which is the hospitals. And as long as hospitals in each and every hospital in each and every Siral City doesn’t get onto a cashless system where we are able to prefix or predetermined the rates. This kind of inconsistency is going to keep happening. Even though our underwriting processes have changed over the years. We have brought in a lot of stringency. There is a committee based approval for every group mediclaim business that is written in New India.
And we pegged the prices much higher based on the loss ratios that have happened. And in spite, and despite the competition, we either let go the business that we are not able to demand or get the price for. And when we write, we write at a sufficient increase so that we are able to absorb that level of loss ratio. But then always the hospitals, they beat us at this game. And therefore you can see that increase. And I am sure that once with a lot of concerted effort from GI Council, from all of us, there is a lot of concern shown by the DFS especially on health because it’s a service that we give to the citizens of this country.
And therefore I think it’s not going to be too far when the health ministry also does something about it. When we have all the hospitals regulated in the country. And that is the day, the golden letter day for health insurance in India and we’ll be surely on top of the charts to give that kind of service for our policyholders. And we have this additional regulation where we can’t increase more than 10% in a year. So our hands are tied. And beyond 10% when we can’t increase the inflation is at 14, we have a straight 4% differential there itself.
And then this is also this quarter, the hike is also because of increase in infectious diseases as you would have read in the press. Additionally there has been a lot of regulatory change in health which is very evolving and lot of circulars that keep coming throughout the year. Some of the latest ones include the inclusion of pre existing diseases and that is also one of the reasons. And there is a new concept called robotic surgery which is being increasingly used for by our customers. And this is something that has possibly not been priced for or taken into account during the pricing.
And because of these various reasons our claim has shot up by 3% which is pretty decent.
Aditi Joshi
Okay, so just to summarize that the pricing hike that we actually took in the last year, I think the impact of those hike has largely translated into the loss ratios and now that going forward it will largely be the function of flame frequency as well as the amount. Is. Is that correct to. Is my understanding correct?
Girija Subramanian
Yeah, see this price cap of 10% came somewhere in the middle of last year when there was a lot of you and cry about retail premiums not being affordable by the larger public. So actually the health we have been, I mean even earlier to that we have been extremely. You know our increase in rates has not been on every year basis. So we did change the rate applicable age wise instead of band wise. And that has somehow maybe spread that kind of increase in premium across each year. But then the premium growth has largely come from all segments, whether it’s retail, gmc, government.
We have increased the premiums even in government business by 20% basis. The ICR on GMC our prices have gone up by 14% in retail by 9%. But despite that the claim ratio has gone up. So which again reaffirms the fact that it is a service provider that now needs to be reamed in.
Aditi Joshi
Okay, okay, got it. And within just moving back, moving to the motor insurance. What is given that we did not have a motor third party hike. So how to think about the incurred flame loss ratio in that segment?
Girija Subramanian
Yeah, see in motor TP basically it is a mandated class. We can’t refuse. So whoever comes we have to give them the COVID Here you can see a slight decrease because we have changed our priority in terms of the segmentation under motor wherein we have overall we have a private car distribution 47%, the commercial vehicles at 45 and the two wheelers at 8%. In the TP we have a private car only of 34%, commercial vehicle exposure of around 56% and the two wheeler at 10%. So this is where the issue happens for the TP wherein the price has not gone up and it’s not in our control either.
So there we have re engineered our workforce to try and change our portfolio mix more in the favor of private car. In the first quarter. I think the response can be senior in terms of the ICR decrease from 111 to 1, not 5%. As far as the motor ode is concerned. Yes, this is mainly because of the strengthening on reserves because earlier year also we had this in tp. We have sent in the reserves last year. That’s why the ICR was at 111 this year. It is normal business as usual. And therefore that is also one of the reasons why the 105 now the OD thing has gone up.
Because this is mainly because of the OEMs and the dealers who demand a huge outgo because of which we are not able to. It’s a very competitive segment A lot of it’s huge competition in this area and when we do not get the businesses that are given away at a very high commission and then this kind of impact is bound to be seen. We have changed our, we have done some kind of dynamic strategy for each of the geographies that we operate on which is right now a work in progress and maybe in the next quarter or quarter after that you may be able to see an improved performance on OD which needs to be monitored on a daily basis.
Is this is something they’re doing right now and I think the results will be seen a quarter later.
Aditi Joshi
Okay, got it. That’s helpful. Thank you.
operator
Thank you. The next question is from the line of Shobhi Sharma from HDSV Securities Ltd. Please go ahead.
Shobhit Sharma
Yeah, hi. Thanks for the opportunity. So I have a few questions around the other opex. So if you look at the, the policyholder account there is a steep decline in the other opex. On the other side, if you look at the shareholders account, there is steep increase. So is there some recategorization which has happened over there? Hello.
Girija Subramanian
Yeah.
Mary Abraham
Yeah, actually we’ll be answering the question.
Unidentified Speaker
The, the reason why the operating expenses have gone down strictly because the employee costs have gone down. The number of employees have actually reduced and correspondingly we also had lesser impact on account of the pension liabilities last year and the same trend continues this year. So that has actually resulted in the operating expenses gone down.
Shobhit Sharma
So I, my question was on other opex employee remuneration. I got that. Can you help us understand around the other OPEX piece please?
Unidentified Speaker
Yeah. On the other opex of course recategorization wise we had moved some of the earlier, some of the provisions that we were making are actually getting into the revenue account but there was a change of policy and they are now moving into the P and L account and.
Shobhit Sharma
There is a steep increase in terms of the other income which we have recognized during the period. Is this sustainable or and what does it relate to?
Mary Abraham
This is the provision that we’ve created. If you’re Talking about the -145 crores, the provision that we’ve created for the non moving reinsurance balances and towards the doubtful debts. So this was done with the main intention of cleaning our book.
Shobhit Sharma
Ma’, am, I am referring to the other income of around 200 odd crores. In the.
Unidentified Speaker
Combination we had another income, what you’re talking about, to the 202 crores of other income which is there.
Girija Subramanian
Yeah.
Unidentified Speaker
So there is a combination of two, three things actually as Per our accounting policy, some of the old balances they we had taken a call of making provisions as well as. So there will be non moving balances which are appearing on both sides. Some need to be provided and some needs to be written back. So the whatever is written back has been put in the form of other income and whatever is written off is put in the form of the provisions. So that actually so if you see the net impact is around 145 crores negative.
Shobhit Sharma
Okay, got it. Now coming on to the business side Ma’ am can you help us understand our approach on the long term motor policies and how and how much business does this segment contributes to our top line Right now.
Unidentified Speaker
Long term motor policy we have launched recently but as of now the proportion is on the lower side. But going forward if you get a right price we will be open to doing long term OD policies even on the OEM side actually.
Shobhit Sharma
Okay ma’, am, now coming on to the health side. So last time you had highlighted that on the retail side health side we have seen a 10% improvement in terms of the loss ratio and you had attributed that to the increase in the claim investigation which was around 34 odd percent for FY25. So can you help us with the same number for this current quarter? How. How are we progressing on the claim investigation, the efficiencies on the claim side and if you can split your health loss issues in terms of retail, group health, employer, employee and the government that would be helpful.
Unidentified Speaker
This as far as retail is concerned, last year we’ve done 30% in house audit by our in house doctors. The current year the target has been fixed as 50% of audit of all the claim files of the retail and also group bill. So surely we are also is planning to introduce the FWA tool also the in house tool. Even though other TPS got enough tools, we also trying to introduce ICR. So this is done. We have last year ICR was 87%. There is a 3% increase mostly with respect to this infectious disease. During this period, always the first quarter there will be some increase in the ICR as far as the health department is concerned.
Then one more aspect is some of the big accounts where we used to pay the single premium of lump sum. So that also.
Shobhit Sharma
Sir, if I heard you correctly you mentioned that.
Girija Subramanian
Sorry ma’, am, the ICR has gone up slightly this quarter as compared to last year. So because of increased incidence of infectious diseases, because of which there’s a lot more hospitalization than earlier, this is something that’s beyond Our control. And as he explained, the audit has gone. Number of audits has gone up from 30% to 50% because we are recruiting 50 more direct recruit doctors into our force. We already have 75. Last year we are adding another 50. So this also proves the amount of, you know, we are going to drill down into this entire claims process for health.
We have also in the, we are building right now customized fraud, waste and abuse tool that will help us to, you know, detect which hospital charges how much for which treatment and where is the leakage.
operator
Hello, ladies and gentlemen, we have the management line disconnected. Please stay connected and reconnect the management. We have the management line reconnected. Please go ahead.
Girija Subramanian
Yeah, so can you hear me?
Shobhit Sharma
Yes, ma’.
Girija Subramanian
Am. Yeah, so as we, as I just said, you know that now the audits have gone up the number, the tools, the technology is being utilized. Even Otherwise earlier the TPAs used to use their, their own tools. We also had an in house tool that we used to use. But we are, we are re customizing the entire thing because we actually, I think there are so many other parameters that we feel we could monitor even more strongly. And we want to see that every case is as far as possible we get for 100% audit. So we are trying to move towards that.
And in that endeavor we are now building our own tool and we are going to see that this is monitored even more closely. And I am sure that with all these efforts, because the first quarter is always the health. I see with these efforts, I’m sure that by the end of the year we’ll bring down the overall ICR for the year to a much better number than what it was last year. Okay.
Shobhit Sharma
Ma’, am, is there any thought around bringing in the health claim settlement on the health side in house?
Girija Subramanian
No, it is not possible with the level of the volumes that we have at the moment. So this year we will be still not having any complete in house settlement, but we do have TPAs. We have a government TPA that does an audit of the other TPAs. So all these systems are there and I don’t see that we going to have any in house. TPA, it’s a very big thing. It takes at least 2, 3 years to adopt one. And then especially in a PSU outfit and then make them ready to take on this kind of an initiative.
It’s a, it’s a kind of a parallel vertical which will require investment of 4, 500 personnel present all across the country, all of that. So it’s a totally different initiative that needs to be thought about. And till then we’ll have to see how much we can bring in efficiencies by way of technology. I think we are trying to adopt technology as a way. We could even supervise the external TPAs and see that there is no leakage from their site. And there is also this parallel initiative. Hospitals coming on board on the NHCX system and cashless being the way forward.
Once that happens, this system over the ecosystem will really, really improve in a much better way. Once it’s cashless. Everything is recorded, there is a database created wherein claims are there. Fraud detection is much more easy than before. So I think the whole industry is working towards it. It’s just matter of time.
Shobhit Sharma
Ma’, am, just one thing which I wanted to understand. Generally we believe that the GIPSA pricing arrangement which you have with the PSC insurance have it gives them a leave of around 20, 25% lower claim size. Is that true or is this something else? Can you help us understand about the GIPSA arrangement?
Girija Subramanian
No, it’s totally untrue. GIPSA is just an association that does a common communication between the DFSR owners and other companies that are the members of gipsa. Beyond that there is no great, no other great efficiency we get by being a GIPSA company. We are competitors in our own right in the market. And we of course are governed by the DFS who are our owners. And even here the thing is we are deeply regulated where health is concerned. We have regular reviews on health, especially on group health, wherein the loss ratios have gone bad a couple of years ago and since then we have been deeply regulated.
Our owners, they are fully aware of the health insurance ecosystem, how it works. So we are reviewed on every aspect of health insurance very strictly and therefore we are answerable and accountable for everything we do here. So therefore I think we cannot take an independent call vis a vis the private sector that does have a lot of liberty to take many calls on many things.
Shobhit Sharma
Okay, ma’, am, got it. Thank you. And all the best.
Girija Subramanian
Thanks.
operator
Thank you. The next question is from the line of nitesh from investech. Please go ahead.
Nidhesh Jain
Thanks for the opportunity. First question is can you share the incurred loss ratio for the retail health segment for quarter one?
Unidentified Speaker
90. 90.
Girija Subramanian
It’s 90%.
Nidhesh Jain
90%?
Girija Subramanian
Yeah.
Nidhesh Jain
Okay, so second is the. In your opinion, what is the possibility of motor TP price hike this financial year? Or we should completely rule rule it out?
Girija Subramanian
No, I mean that is what. So we have no clue whether, you know, it will get increased this Year Our hope and prayers are for that because in this endeavor I think GI Council has worked a lot throughout the last year and several representations have gone. I myself have been a part of one of the meetings when we met Moth and we had these discussions with them and at that point of time we did feel that something surely would come out if not in the same format, the pricing would definitely undergo some more segmentation and it would come.
But I think right now that is still not happening and right now we have no clue whether it will come out in a month’s time, three months time. No clue actually.
Rehan Saiyyed
Sure. And last question is that we are witnessing now competitive intensity from other PSU entities in the motor on damage segment and we are seeing a bit of irrational pricing. So what is driving that? The balance sheet position of other PSU is not that is that strong. So what is actually driving this? And this will all end but negatively for them over medium term. But what is making them so competitive in the near term?
Girija Subramanian
Yeah, I will not be in a position to comment on any other organization.
Nidhesh Jain
Okay, thank you. Thank you. That’s it for my side.
Aditi Joshi
Thank you.
Girija Subramanian
Thank you so much.
operator
Thank you. The next question is from the line of Aditi Joshi from JP Morgan. Please go ahead.
Aditi Joshi
Thanks for the opportunity. Again, just a couple of follow up questions. The question on the fire insurance, the growth was pretty decent in terms of the premiums. So just want to understand like how is the competitive intensity and the pricing environment looking and what is the outlook going forward under the fire segment for the rest of the year. And second, if you are able to provide your guidance on the combined ratio for FY 2026 that will be actually helpful. Thank you.
Girija Subramanian
Yeah. So fire insurance has been New India’s forte. We’ve been the leaders all along. We continue to be and we will surely be in the future. Also we are the largest insurer for the large risk segment which is, I mean we have been the leaders and it’s always an insurer of of choice for most of the large risk owners to go with New India. And so it’s no surprise that we’ve done so well. But that apart, the main reason for the increase is because the last year had witnessed a deep decrease in pricing in fire from the months of May to December when the pricing discounts were in the range of 90 plus.
And that is the discounting when we talk about it is from the IIB pricing that was prevalent in the market before that. Now since there is no tariff in the market, IB pricing was something that was adopted by the market and then they decided not to go with it and therefore it dived down. And then after that I think because this is heavily reinsurance driven line of business and therefore the reinsurers had to step in and warn each one of the insurers that they would take off the reinsurance protection from the 1st of April. So once they did that the market quickly got back into discipline from the 1st of January and started quoting better rates at least to in line with the loss ratios in the segment.
And therefore there was definitely when you see 80, 90, then obviously when you recollect and then you see something closer to reality, you are bound to see a decent 20% growth. And that is one of the reasons that the growth is at 19.95. But apart from that, New India has acquired a couple of new clients. We are very proud about them to have them with us and I am sure that this growth will be there going into the future also because, because this is a reinsurance driven line. As long as reinsurers maintain leash on capacity, this will continue to grow.
Aditi Joshi
And on the combined ratio guidance for the year.
Girija Subramanian
Yes, combined ratio guidance. I already said that we are aspiring to have a combined ratio 3% lower than 116, which would be around 113 maybe for this year.
Aditi Joshi
Okay, got it. Thank you so much.
operator
Thank you. Thank you very much, ladies and gentlemen. That was the last question. I now hand the conference over to Mrs. Girija Subramaniam CMD New India Assurance Co. Ltd.
Girija Subramanian
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operator
Thank you, ma’. Am. I thank everyone on behalf of the New India Assurance Co. Ltd. And Concept Investor relations. You may now disconnect your lines.