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National Insurance in the black

Calcutta, Sept. 5: National Insurance Company (NIC) has posted a net profit of Rs 134.91 crore in 2002-03 against a loss of Rs 90.45 crore in the previous year.

The company has also closed down its loss-making Hong Kong branch and has provided for its Rs 105 crore loss in the accounts. The company is now left with only one overseas branch at Kathmandu.

Chairman and managing director H. S. Wadhwa said, “The jump in profitability can be attributed to a reduction in the incurred claims ratio, a check on the increasing management expenses and a massive income from its investments. We will be able to generate Rs 250 crore in the current financial year.”

The company has declared a 25 per cent dividend for its shareholders.

In 2002-03, the company’s premium income grew at a rate of 21.06 per cent on domestic business as compared with 11 per cent in 2001-02. The company has increased its premium base to Rs 2870 crore in 2002-03 from Rs 2356 crore in 2001-02.

Wadhwa said the company was able to bring down its incurred claims ratio to 76.01 per cent of the net premium in 2002-03 from 95.14 per cent in the previous year. This is mainly due to a reduction in its claims ratios in fire and miscellaneous business.

A special taskforce for speedy and amicable settlement has reduced the interest outgo on suit claims considerably.

The company has been able to reduce management expenses ratio to 20.9 per cent of the gross premium income from 24 per cent in the previous year.

National Insurance has earned an investment income of Rs 485.88 crore in 2002-03 against Rs 439.76 crore in the previous year. This accounts for a yield of 12.8 per cent. The total investment corpus of the company has increased to Rs 3669.75 crore in 2002-03 from Rs 3524.84 crore in the previous year.

Wadhwa said the company had taken the reserve for unexpired risk under marine cargo business at 100 per cent of net premium over the stipulated 50 per cent set out by the Insurance Regulatory and Development Authority.

Wadhwa said, “The government will have to decide on the voluntary retirement scheme (VRS) issue. But we feel that there is no need of VRS. Rather we want more manpower to market our products.”

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