Oriental Insurance FY06 net profit down by 14%

New Delhi, June 20 (UNI) The Oriental Insurance Company today reported a 14 per cent drop in it net profit at Rs 283.91 crore for the year ending March 31, 2006, as against Rs 330.52 crore last year.

The decline in the net profit has been largely on account of the additional burden imposed on the company due to the Maharashtra floods.

''Oriental's net profit before tax was of the order of Rs 334.19 crore in 2005-06, which is less by Rs 137.51 crore a year ago,'' Oriental CMD M Ramados told a news conference here.

The net profit before tax was Rs 471.70 crores in 2004-05.

The loss from underwriting worsened from Rs 599.67 crore in 2004-05 to Rs 762.98 crore in 2005-06, registering a difference of Rs 163.31 crore.

However, this loss was compensated by higher income from investments, dividends and rent which improved from Rs 1071.37 crore in 2004-05 to Rs 1097.17 crore in 2005-06, a gain of Rs 25.80 crore.

Mr Ramdoss said the company's net retention decreased by 2.50 per cent from 71.77 per cent to 69.27 per cent. This was mainly due to lower retention in fire, engineering and marine hull portfolios as a result of uderwriting lower risks.

The payment of reinstatment premium for XL cover, which was exhausted as a result of Mumbai floods, was affected by net retention ratio, Mr Ramdoss said.

The following are the other highlights of the annual results of the company; -- Net premium improved by 282.44 crores with this figure being Rs 2,500.46 crore in 2005-06, a growth rate of 12.84 percent; -- Net Incurred claims were negative to the tune of Rs 2,064.7 crores in 2005-06 as compared to Rs 1,908.38 crore, which is difference of 156.36 crore; ---solvency increased from 1.01 in 2001-02 to 1.14 in 2002-03 to 1.37 in 2003-04 to 1.46 in 2004-05 and to 2.14 in 2005-06; ---the Net Incurred Claim ratios in Own Damage decreased from 55.02 per cent in 2004-05 to 48.36 per cent in 2005-06; --- Net Incurred Claim Ratio in Motor Third party decreased from 229.39 per cent in 2004-05 to 180.11 per cent 2005-06; -- Net Incurred Claim ratio in Health increased from 77.29 per cent in 2002-03 to 99.29 per cent in 2002-03 to 99.29 per cent in 2003-04 to 113.63 per cent in 2004-05 to 118.23 per cent.

Mr Ramdoss said Oriental will continue on the path of profitable growth of at least ten per cent in the current year and was hopeful of making the Motor and Health portolfio profitable in the years to come.

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