The New India Assurance Company, the largest non-life insurance company in the country, has recorded a 11.64 per cent growth in gross premium in 2002-03 at Rs 4,813 crore (48.13 billion).

This makes it the first non-life Indian company to cross the $1-billion mark in premium income, with Rs 3,921.24 crore (Rs 39.21 billion) mopped up from the domestic market and the balance Rs 891.55 crore (Rs 8.91 billion) raised from the foreign operations.

Liberalisation of the insurance industry has, however, taken its toll on public sector players, especially New India, whose growth rate was higher (at 14 per cent) in 2001-02, when its aggregate premium income stood at Rs 3,512.33 crore (Rs 35.12 billion).

This has resulted in New India softening its targets for 2003-04. According to the management, the company has set a very conservative growth rate target in keeping with the developments in the industry.

Total gross premium is expected to touch Rs 5,000 crore (Rs 50 billion) by March 2004. On the domestic front, New India expects premium to touch Rs 4,089.75 crore (Rs 40.90 billion), reflecting a rise of 3.83 per cent. On the foreign business, the company is targeting a five per cent growth in gross premium income at Rs 935 crore (Rs 9.35 billion).

Said company officials: "If we are to write more business, we need to remit additional funds, taking into account local solvency margins and the need to maintain statutory class of investments."

Meanwhile, New India has posted the highest net profit in the industry at Rs 255.81 crore (Rs 2.56 billion) in 2002-03. This reflects a jump of 80 per cent against last year's figure of Rs 142 crore (Rs 1.42 billion).

"We intend to focus on our bottomline more than our top line as we wish to write good business," New India's chairman and managing director R Beri said.

This has been reflected in New India's ability to bring down its underwriting losses to Rs 24 crore (Rs 240 million) from Rs 88 crore (Rs 880 million) in fiscal 2002.

Aside from prudent underwriting, New India's net investment income of Rs 762 crore (Rs 7.62 billion) was able to offset the underwriting deficit. Its incurred claim ratio has equally declined from 83.28 per cent to 76.77 per cent in 2002-03.

On the back of higher profitability, in the first year of delinking from the General Insurance Corporation of India, New India proposes to pay a dividend of Rs 40 crore (Rs 400 million) to the government.

This is as against its payment of Rs 20 crore (Rs 200 million) last year to GIC, which said Beri is the highest dividend paid.

Against a growth rate of 11-odd per cent on the domestic front, New India's foreign premium income rose higher by 30.01 per cent, taking its gross premium earnings to Rs 891.55 crore (Rs 685.73 crore). However, this growth was lower than the 50 per cent increase in premium income reported in fiscal 2002.