Atul Sahai, CMD, the New India Assurance Co Ltd, talks about the Q1FY21 results, claim ratio, operating expense ratio, the contribution of retail, corporate health premiums, outlook on motor insurance business, company’s product Corona Kavach among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts: 

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Q: New India Assurance has posted its Q1FY1 numbers and reported a 3% rise in its profit, the gross premium also grew by 6.50% and net premium grew by 7%. What was the claim ratio and operating expense ratio of June quarter?

A: Going by our own standard the growth of 6.5% is very low but when seen in the backdrop that the direct insurance or general insurance industry has gone by 12%. We have grown by 6.50% when there is a 12% drop in the segment. It is a commendable job and its entire credit goes to my team. Interestingly, the investment that we have made on our IT platform has played well. Our digital presence is very strong and this is something that helped us in doing so. I hope that we will do well in the coming future. 

Q: What was the claim ratio and operating expense ratio this quarter and what are the expected levels?

A: Our claim ratio has been very low this time and stands around 67.7%, which is quite low. It remained low because 

If you have tracked our performance then you would have seen that there has been a drop in our combined claim ratio in last 5-6 quarters. This was also a step towards the same but this time there was less traffic on the due to the lockdown which resulted in fewer motor accidents leading to a gain of around 10-12% as less claim ratio has reached us. The overall claim ratio stood at 68%.
Expenses of management have been under limits but we were supposed to provide certain expenses like liabilities of pension. All these things have increased the management expenses in this quarter as the cost of our pension has increased. LIC has increased annuity rates and interest has softened due to which we have to do some extra provisions. This led to an increase in the expenses of the management or else our expenses of management remain between 14% and 15%. 

Q: Tell us about the contribution of retail and corporate health premiums, respectively?

A: As a company, we have grown in all line of business except motor. The motor business has remained low because there was no sale and those who were not able to move out were also provided with an extension that they can get their insurance done even after a gap of a month or two. So, it had an impact on the segment. But we have grown well in other segments may it be marine or aviation or miscellaneous or property. As far as retail health is concerned then this unfortunate pandemic has increased awareness among people. So, there is a growth in our retail health business. 

Q: What is your outlook on the motor insurance business as there is a slight increase in demand? Do you think that it will improve, if yes, then what are the timelines for it?

A: Yes, the motor insurance business should also pick up. The whole world lives on hopes and hope is the complete world for us. I feel that the motor insurance business will progress in the coming festive season. Ultimately, everything is a reflection of the general economy and I hope and pray the pandemic ends at the earliest. Things will fall in line if the situation will start moving towards normalcy. But right now, I can’t see this motor business moving on the path of growth for the next 2-3 months. October onwards some positive changes can be seen in the segment. 

Q: The IRDAI has asked insurers to take action against hospitals that deny cashless facilities despite being a part of the network. What has been your experience with the hospitals?

A: We have not had such a bad experience. Possibly, we are at an advantageous position as New India assurance because our tie-ups with the hospitals are very old. Hopefully, there are few unethical hospitals but we don’t have to deal with them. Generally, we are quite connected with the hospitals and for the purpose, we have a special agreement, named as Preferred Provider Network (PPN). It helps us in being connected with the hospitals. It also has prescribed rates of the defined surgeries. The long-term relationship provides an advantage to us. At times, there are news related to exploitation at the hospitals but New India hasn’t experienced such things. If it would have occurred at a place or two then our team responds to it actively by reaching to the hospital. Interestingly, there is a quick response from the hospital. For the purpose, we have created three-four email IDs and also reached out to the call centres. We get complains here. Undoubtedly, the person will get nervous when someone is sick but we reach out to them as soon as he emails his concern to us. We have a committed mail and call centre for the purpose. As far as New India Assurance is concerned then we don’t have any bad experience with any hospital. Hopefully, there are one or two such hospitals and we take action against those. 

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Q: How is the response for your product Corona Kavach? It has an affordable premium. Are you going to rework on the prices given the continuous rise of cases in India? Also, tell about the new kind of products that you will bring into the market?

A: First I would like to answer the last part of your question related to the new products. We have an R&D department who has a job to under the mood of the people and find out the kind of products they want and we make products accordingly. This year too, we have already made 7-8 products. As far as Corona Kavach is concerned then it is a good policy and is selling but we don’t want to revise its rate at present. Considering ourselves as such a large insurance company as well as a government company we also have a social responsibility. We don’t want to prosper on someone’s pain. Corona Kavach was brought out to take coverage of the common man. This disease is already covered in our existing policy, it is not so that Corona was not covered under them but they were expensive as almost everything was covered under them. Therefore, a standalone product that covers the only corona was launched. We just don’t have a purpose to increase insurance awareness among people and people get themselves covered but it is our corporate social responsibility to reach out to people and make such products where we don’t earn profits. So, we don’t have any plan to revise its rate.