Despite data on uninsured vehicles, many still without cover: New India chief

The country’s largest insurer New India Assurance has reported an improvement in its underwriting performance for Q4FY25 with a combined ratio (claims + management expenses: premium) of 111.5% compared to 119.3% in Q4FY24. In an interview to Mayur Shetty, Girija Subramanian, chairman and managing director shared her plans to increase marketshare and profits.

Your combined ratios have improved, but your investment income has dropped considerably. Do you expect this volatility to continue?

The markets were down in the last quarter, which impacted our investment income. That’s the only reason for the decline. We are looking into this more objectively and will work on a strategy to keep earnings more consistent quarter to quarter. We aim to address this slide in the current year.

Industry premium grew by around 6.2%, but your growth is 4.5%. What explains the slower pace?

Our portfolio is weighted more towards commercial vehicles, which have higher incurred claim ratios (ICRs). We have been telling our regional offices that we want a shift toward private cars and two-wheelers. When we do that, there's a lot of competition in that segment, higitgh commissions, credit card charges, and so on.

We’ll be working on this segment-wise in the coming year, and I think we should be able to crack it. We also hope that the MoRTH (ministry of road transport and highways) will revise the third-party premiums this year because they have not been revised for five six years and the court awards (to accident victims) are going up with inflation.

How has the relaxation in the cap on commissions affected you?

The broader cap means we have to pay higher commissions to OEMs and dealers. But as a PSU, we have limitations and can’t match the flexibility that private players have. We’re increasing our engagement with OEMs and dealers at higher levels and also working with web aggregators to boost retail premiums. With these efforts, we hope to regain market share in motor insurance.

How is the PhonePe distribution partnership performing?

It’s going well, but there’s room for improvement. We’re working with them to enhance income from that channel. They are distributing mainly simple insurance policies. So far, it hasn’t made a big impact, but we plan to focus on it more.

Are you planning more digital partnerships?

Yes. We already have MOUs with a couple of web aggregators and plan more such agreements. There is a strong push on digital channels this year, including bancassurance and other retail-focused platforms.

Your fire insurance portfolio has shrunk. Why?

Between May and December, we lost premium because we didn’t lower our pricing beyond a point, so we lost business. We’ve avoided taking on unsustainable risks in fire, health, and group medical cover. That has helped bring the combined ratio down.

Which segment has seen the biggest improvement?

Company-wide, the combined ratio has improved. Specifically, the motor incurred claims ratio has improved by around 3%, and health has improved by 5%. Since our portfolio is mostly group-based, and we’ve shed unviable group business, that’s contributed to the improvement.

How much have you invested in IRDAI-led platform Bima Sugam? Will it increase competition for you?

We’ve invested the same amount as other companies, since it is an e-marketplace promoted by the regulator. All entities, including private players, are participating. So yes, competition will increase.

What pricing trends do you see in health and motor?

We do not see any hardening in prices; they’ve remained flat. Rates are driven by hospital billing and agreements in health insurance. Hospitals overcharge where there’s no MoU, worsening the claims experience. Without standardised hospital pricing, there aren’t any cost benefits we can pass on to customers. In motor, own-damage rates remain soft. We are hoping for a hike in third-party premiums. That would allow us to focus more on the own-damage segment.

Has compliance improved in third-party insurance?

There has been some improvement, but what we understand is that only 52% of vehicles are insured. Although data is available many vehicles remain uninsured.

You want to increase market share amid rising competition. What’s the plan?

We’ve launched several initiatives in the last few months. This year, we’ve declared it the "Year of SME" for New India. We have products designed for SMEs and are now focusing on expanding significantly in this segment. As a national PSU, we believe it is our responsibility to support the government's financial inclusion agenda and contribute to the Prime Minister’s vision of making India a developed nation by 2047.

LIC has announced plans to acquire a health insurer. Do you have any acquisition plans?

I feel if at all we have to get into life business, we’ll have to work our way through for some more time and make ourselves financially stronger. LIC is definitely financially much more sturdy than New India.

Do you see a larger role for the PSU-promoted Health Insurance TPA of India?

Last year, it saw increased business and turned profitable. They're now looking to expand further. However, several areas still need attention to make operations more customer-centric and more profitable. So yes, I believe they will continue to grow in future.