Health claims IGI Insurance profits

If first half results are any guide, then managers at IGI Insurance are probably thanking their counterparts in IGIs associate concern for saving their day.
The firms underwriting results for the first half ending June 2013 were quite literally in bad health, as its health segment lost nearly Rs67 million during the period. Health segment had made up nearly a tenth of aggregate underwriting profits in the year-ago period.
The health segments net claims more-than-doubled over last year to hit Rs178 million in first half CY13-taking the ratio of aggregate net claim to net premium to 83 percent, which was largely responsible for the erosion in underwriting results. This ratio stood at 60 percent in the preceding two half years ending June 2012 and 2011.
In addition to health segment, underwriting profits for fire and property segments also tanked sharply, whereas profits from marine, aviation and transport segments dropped nearly 28 percent year on year.
General and admin expenses meanwhile rose by 56 percent year on year, where it is worth pointing out that these expenses as a percentage of net premiums increased to 19 percent in the first half CY13 from 12 and 14 percent in the preceding two years.
Poor underwriting results were saved in part by 74 percent growth in investment income. However, the real saviour was IGI Insurances associate concerns that yielded a profit of about Rs250 million.
Considering that the associate concern had contributed losses in the comparable periods of 2012 and 2011, this years profit contribution came just when the insurer needed it to support its bottom line.

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IGI INSURANCE - KEY P&L ITEMS

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Rs (mn)                               1HCY13   1HCY12    Chg

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Underwriting result, of which           -8.2    117.7      -

Net premium                              508    486.5     4%

Net claims                             421.5      291    45%

Investment Income                        380      218    74%

Financial Charges                         20       29   -31%

General & Admin expenses                94.6     60.5    56%

Share of profit/loss from associate    249.9   -145.1      -

NPAT                                   447.8     72.7   516%

EPS (Rs)                                4.02     0.65      -

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