Higher claims and provisions pulled down earnings despite growth in premium as well as investment income.
Net premium income increased 14 per cent to Rs 11,444 crore due to growth in both the first year as well as renewal income. Income from investments increased 40 per cent to Rs 8873 crore from Rs 6319 crore a year earlier.
Net benefits paid increased 75 per cent year on year to Rs 8338 crore from Rs 4756 crore last year.
The company also added Rs 60 crore to its excess mortality reserve (EMR) this quarter to any unexpected claims for the rest of the year taking the total reserve the company holds to Rs 204 crore after using up Rs 556 crore in the last year.
CEO Vibha Padalkar, expressed hope that the intensity of any subsequent wave of the pandemic would be muted as about 70 per cent of the adult population has received at least one vaccine dose.
The company settled 2 lakh claims in the first half of the fiscal year at a net amount of Rs 2466 crore. Padalkar said the claims were higher than usual most likely because a majority of them were due to the pandemic.
The company’s new business margin (NBM) expanded by 130 basis points to 26.4 per cent in the first half of the fiscal from 25.1 per cent a year ago. NBM is the value of new business expressed as a percentage of the present value of future profits.
The total value of the new business for the company was Rs 1,086 crore, growing 30 per cent over the last year.
Padalkar said the company is well provided for any unexpected claims due to the pandemic but will protect its margins by hiking premiums in case of a likely hike in charges by reinsurance companies.
“We have been talking to reinsurers and the situation will only be clear a few months down the line. In the last few years, our margins have always improved and we want to maintain that so margins will be protected,” Padalkar said.
