How Did Non-Life Insurance Companies Perform till Third Quarter This Fiscal Year? Compare the Key Metrics

Tue, May 18, 2021 6:08 AM on Financial Analysis, Stock Market, Exclusive,

When we take a look at the numbers of non-life insurance, it seems that this sector has been growing at a steady rate. Previously, the business penetration was quite low and was not achieving its full potential but due to the covid-19, it has brought a favorable scenario for the insurance business which can be seen by the increasing numbers. 

So, let's dive into the major indicators of non-life insurance in the third quarter of FY 2077/2078. 

Net Profit:

Shikhar Insurance Company Limited (SICL) posted the highest net profit of Rs 36.33 crores till Q3 of 2077/78. The second-highest profit of Rs 35.09 crores was reported by Neco Insurance Company Limited (NIL). The industry average net profit stands at Rs 17.78 crore.

Among all the companies, 2 companies reported a decline in net profit in comparison to the corresponding quarter of the previous year.

Paid-up capital

The regulator of the insurance industry, Beema Samiti, has set the minimum paid-up capital requirement at Rs 1 Arba.

Shikhar Insurance Company Limited (SICL) reported the highest paid-up capital worth 1.75 Arba. Neco Insurance Company Limited (NIL) reported the second-highest capital worth Rs. 1.31 Arba. 

As per Q3, only 1 company; Rastriya Beema Company Limited (RBCL) reported less than regulatory requirement capital. 

Reserves and Surplus

The reserve and surplus have an outlier at the upper end. RBCL has the highest reserves of Rs 3.10 Arba which also impacts the industry average figure.

Following RBCL, SICL has the highest reserves of Rs 71.33 crores.

Insurance Fund

RBCL and SICL have the highest insurance fund of Rs 2.38 Arba and Rs 1.23 Arba respectively. The industry average insurance fund stands at Rs 72.22 crore. 

Net premium

Net premium is the main source of earning for insurance companies. The average net earnings from premium stood at Rs 55.18 crores till Q3 of 2077/78.

NIL reported the highest earning of Rs 1.36 Arba followed by SICL at Rs 1.08 Arba. 

On the flip side, Sanima General Insurance Company Limited (SALICL) reported the lowest Net premium of Rs. 13.84 crores.

Net Claims:

In terms of the net claim, Rastriya Beema Sanstha (RBS) reported the lowest claim amounting to Rs. 3.43 crores. 

On the other hand, Shikhar Insurance Limited (SIL) reported the highest claim of Rs. 64.02 crores.

Number of policies

The average number of policies stands at 115,600. NIL and SICL ranked highest whereas SGI and RBCL are in lower positions among the old companies.

Unpaid Claims:

The average unpaid claims stood at Rs. 14.74 crores. As per the report published by the company's Rastriya Beema Company Limited (RBCL) has the lowest unpaid claims worth Rs. 14.74 crores. 

On the other hand, Premier insurance Company Limited (PIC) has the highest unpaid claims worth Rs. 2.18 Arba.

Net worth per share

RBCL has the highest net worth per share of Rs 2158.35 per share given its low capital base. SIC has the second-highest net worth of Rs. 256.63. The industry average net worth per share stands at Rs 297.14 per share.

Annualized EPS

The highest annualized EPS has been reported by RBCL at Rs 135.02 followed by SIL at Rs 38.01. The lowest annualized EPS was reported by UIC at Rs 6.84 per share.

PE ratio

The industry average PE ratio stands at 66.35 times. The lowest PE ratio was reported by PIC at 35.81 times followed by NICL at 42.55 times.