General insurers’ FY19 PAT falls 90%

Profits after tax of the general insurance industry stood at Rs. 683 crore for 2018-19, compared with of Rs. 6,909 crore in 2017-18, down by almost 90%, show the numbers from the latest annual report of the Insurance Regulatory and Development Authority of India (Irdai).

The sharp fall in the profit can be attributed to public sector insurers that saw heavy claims due to the floods in Kerala and crop insurance. Private general insurers, in comparison, saw their profits falling marginally. Public sector insurance companies saw a loss of Rs. 3,288 crore in 2018-19, compared with net profit of Rs. 2,543 crore in 2017-18.

Irdai data also show that out of four public sector insurers, only New India Assurance reported a profit after tax of Rs. 580 crore in the last fiscal, against Rs. 2,201 crore in 2017-18. National Insurance and Oriental Insurance reported losses of Rs. 1,696 crore and Rs. 294 crore, respectively. United India Insurance reported loss of Rs. 1,878 crore.

A senior official from one of the public sector insurers said, “Last financial year was tough as there were heavy claims due to the floods in Kerala last year and high claims in crop insurance. Also, high claims in group health insurance business led to losses for a few public sector insurers.” While public sector insurers saw losses, private sector insurance companies reported net profit of Rs. 3,584 crore in FY19, against Rs. 3,798 crore in FY18.

Last fiscal, specialised insurers reported net profit of Rs. 685 crore, against Rs. 670 crore in 2017-18.

Source: Financial Express