Bajaj Allianz General logs 28% growth in net income to Rs 425 cr as COVID claims ebb in Q2

Bajaj Allianz General Insurance has booked a 28 per cent growth in net income to Rs 425 crore in the September quarter, as the claims from the pandemic ebbed.

The leading non-life player had registered a Rs 322 crore net profit in the same period of FY21.

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The bottomline grew 21.1 per cent to Rs 5,034 crore in the reporting quarter from Rs 4,156 crore a year ago, despite the challenging times because of floods and cyclones amid the ebbing impact of the pandemic.

The company had robust performance in the September quarter, with revenue increasing 21.1 per cent to Rs 5,034 crore from Rs 4,156 crore in Q2FY21.

Despite the heavy losses from the monsoon floods and cyclone, we booked a net profit of Rs 425 crore, registering a growth of 28 per cent from Rs 332 crore in the same period last year, Tapan Singhel, MD and chief executive of

Bajaj Allianz General Insurance, told PTI from his Pune headquarters on Wednesday.

Growth was led primarily by health insurance, mainly driven by government health business, a revival in the motor segment that grew 7.4 per cent despite the two-wheeler segment continuing to decline, Singhel said.

During the second quarter, fire grew 31.5 per cent to Rs 445 crore, marine cargo grew 35 per cent to Rs 43 crore, motor inched up 7.6 per cent to Rs 1,206 crore, health soared 154.9 per cent to Rs 1,433 crore from Rs 562 crore, taking the H1 policy income from this segment to Rs 1,984 crore, up 96.1 per cent from Rs 1,012 crore.

However, crop insurance declined 12.3 per cent to Rs 1,542 crore from Rs 1,759 crore and so did engineering, which dipped 9 per cent to Rs 58 crore from Rs 64 crore, and aviation de-grew by over 31 per cent to Rs 3 crore from Rs 5 crore.

Floods in Maharashtra saw the company settling over 1,000 claims worth close to Rs 300 crore and for the cyclone Tauktae it settled over 1,000 claims worth over Rs 500 crore.

For Q2 FY22, the loss ratio stood at 77.6 per cent against 74.2 per cent in Q2FY21; however, excluding heavy rains and COVID-19 claims impact, the loss ratio was 73.7 per cent against 69.4 per cent in Q2 FY21, Singhel said.

The first half was overall bad as the second wave took a heavy toll in the first quarter coupled with natural calamities. Yet, irrespective of the challenges, the company reported a 16.8 per cent revenue growth at Rs 7,529 crore in

H1FY22 over Rs 6,445 crore in the same period last year, Singhel said, adding the company had settled 300 per cent more pandemic claims during the first half.

The company made an underwriting profit of Rs 19 crore in H1FY22 despite the difficult conditions and also managed to maintain a solvency ratio of 350 per cent, showcasing a well-capitalised company, he added.

The bottomline was also helped by healthy growth in investments income, which grew 35 per cent to Rs 1,032 crore in H1FY22 over Rs 766 crore in the same period last year.

In terms of gross direct premium income, the company is ahead of the industry, clipping at 21 per cent as against the industry growth of just 12.1 per cent in Q2, he said.

On the claims from the second wave of the pandemic, Singhel said it has impacted the loss ratio of the industry very badly.

When it comes to Bajaj Allianz, we had over 300 per cent increase in COVID-19 related claims compared to the same period last year, Singhel said, adding an interesting point to note here is that, while we're seeing a gradual decrease in claims from the pandemic issues with more people getting vaccinated, we are also witnessing an increase in non-COVID claims in H1FY22, which is about 50 per cent more than such claims in H1FY21.

On whether the virus has been successfully contained, he said it is too early to call it a victory, as we can't predict the future.

On the positive side, the regulator Irdai has formed a working group to explore the possibility of forming a pandemic pool that will help towards stabilising the economy if we face such severe lockdowns due to pandemics again, he said.

The pandemic has made us realise that we need to better our healthcare infrastructure to provide timely medical support to those in need, he said and urged other states to follow Rajasthan and J&K, which has insured almost all its eligible citizens.

He also called for a healthcare sector regulator and reducing the GST on insurance policies.

Sounding hopeful, Singhel said we are already seeing pick up in motor insurance and travel insurance. Commercial lines of business are also gaining momentum. Hence, I believe by the time we enter the next fiscal, there should be enough and more stability in the industry.

The key is more vaccination and containing a third wave, he concluded.