United India Insurance posts 24% growth in net

Chennai, July 30 United India Insurance Company, the Chennai-headquartered public sector insurance company, has reported a 24 per cent growth in net profit at Rs 529 crore for the year 2006-07.
The company has also announced a 70.5 per cent dividend of Rs 105.77 crore on the enhanced capital of Rs 150 crore.
Gross premium of the company climbed 11 per cent to Rs 3,499 crore. Of this, Rs 664 crore was contributed by fire segment, Rs 263 by marine insurance (both cargo and hull) and Rs 2,570 crore by miscellaneous items including engineering, motor, health and other insurance.

Announcing the results, Mr M.K. Garg, Chairman & Managing Director, said that prudent underwriting and improved claims management besides cutting down of expenses had helped post an improved performance. Additional provision
Mr Raju Sharan, Financial Advisor, said profits might have been higher but for an additional provision of Rs 163 crore on account of Accounting Standard – 15 (employee benefits).
He said the company had taken the decision to absorb the additional provision this year itself (instead of spreading it over the next few years).
Mr Garg said that there was not much of an impact on the results because of the detariffing that came into effect in the last quarter of the last fiscal. The company could maintain a growth rate of 11 per cent despite a 25 per cent decline in fire and engineering insurance rates.
Asked about the drop in investment income, Mr Garg said that this was due to markets being volatile last year and the company’s own cautious approach.
In 2005-06, there had been a higher target for sale of shares in view of the requirements to meet wage arrears. This year there was no compulsion and the management also felt that there would be a further rise in stock prices and hence did not liquidate its holdings significantly.
The company expects to achieve a premium income of Rs 4,000 crore in the current fiscal.
source:Business Line