Welcome to the conference of the New India Assurance Company Limited, arranged by Concept Investor Relations, to discuss its Q1 FY'26 results. We have with us today Mrs. Girija Subramanian, Chairman, Managing Director; Mrs. Smita Srivastava, Executive Director; Mrs. Kasturi Sengupta, Executive Director, General Managers, and Chief Financial Officer, among other SGM management members. At this point, all participant lines will be in the listen-only mode. Later, we will conduct a question-and-answer session. At that time, if you have a question, please press star and one on your touch-tone telephone. Please note this conference is being recorded. I would now like to hand the floor over to Mrs. Girija Subramanian, Chairman, Managing Director. Thank you, and over to you, ma'am.
Good afternoon, everyone. I'm Girija Subramanian, Chairman, Managing Director of the New India Assurance Company Limited. I welcome you all to discuss Q1 FY '26 financial and operational performance of the New India Assurance Company Limited. I am joined today by Mrs. Smita Srivastava, Executive Director, Mrs. Kasturi Sengupta, Executive Director, General Managers, Chief Financial Officer, and other management members. At the outset, I would like to extend a warm welcome and express my sincere appreciation to all of you for joining us this afternoon. I would also like to thank our shareholders, investors, and analyst community for your continued trust and confidence in New India Assurance. Your steadfast support is instrumental in driving our progress and strengthening our commitment to sustainable growth. Before delving into our financial and operational performance for the first quarter FY26, I will begin with a brief overview about our company.
Following that, we will open the floor for the question-and-answer session, where my team and I will be happy to address your questions and provide any necessary clarifications. As we gather here today, New India Assurance stands at a pivotal juncture, reflecting on a legacy of over a century of serving the nation while simultaneously charting an ambitious course for the future. Our journey has been defined by resilience, adaptability, and an unwavering commitment to our policyholders, stakeholders, and the broader Indian economy. We are a 106-year-old insurance company conceptualized by Sir Dorabji Tata in 1919 and nationalized in the year 1973. We have a pan-India presence with 1,668 offices across the country and presence in 25 countries. As the largest non-life insurer in India, in terms of gross direct premium, we remain committed to delivering excellence through prudent underwriting, superior claim service, and customer-centric innovations.
In the past quarter, despite the dynamic and often challenging global and domestic landscape, New India Assurance has demonstrated robust performance, reinforcing our position as a leader in the Indian general insurance sector. Our strategic initiatives, prudent underwriting practices, and customer-centric approach have yielded commendable results, which we are eager to share with you in detail today. The general insurance industry stands at INR 79,301.21 crores as of June 25, reflecting a year-on-year growth of 8.84% as per the General Insurance Council's data. Of this, New India Assurance has underwritten INR 12,299.49 crores, accounting for approximately 15.51% of the total gross direct premium underwritten, which represents a robust 15.27% year-on-year growth. This highlights the distribution mix: stands at direct 33.28%, agency 21.73%, banker 0.54%, dealer 5.65%, broker 88.80%.
Product mix stands as follows: Health and PA 50.19%, Motor TP 10.61%, Motor OD 10.65%, Marine 2.51%, Fire 17.04%, Crop 0.94%, and Others at 8.06%. In Q1 FY26, ratings agency CRISIL has reaffirmed its CRISIL AAA stable rating, which is considered to have the highest degree of safety for your company. Furthermore, AM Best has assigned the India National Scale Rating (NSR) of AAA in Exceptional and has affirmed the Financial Strength Rating of B++ Good and a Long-Term Issuer Credit Rating of BBB+ Good to the New India Assurance Company Limited. The outlook of these credit ratings is stable. New India Assurance Company Limited has consistently upheld the vital balance between sustainable growth and robust profitability, recognizing it as fundamental to organizational resilience. Our operational ethos ensures that each underwritten policy is thoroughly risk-assessed, directly enhancing shareholder value.
Consequently, we have made the deliberate choice to opt out of corporate accounts lacking revenue accretion, instantly compensating with the strategic acquisition of premium low-risk policies. The positive outcome of these concerted efforts is demonstrably evident in our first quarter FY'26 performance as follows below. Financial performance: the Gross Direct Premium Income Indian business stood at 12,299.49 crores in Q1 FY'26 as compared to ₹10,070.47 crores in Q1 FY'25. The Gross Direct Premium global stands at 13,333.58 crores in Q1 FY26 as compared to 11,787.92 crores in Q1 FY'25. Net Premiums Earned reported at ₹9,369.42 crores in Q1 FY'26 as compared to ₹8,503 crores in Q1 FY25. Net Worth stands at ₹22,279 crores in Q1 FY26 as compared to ₹21,343 crores in Q1 FY'25. Net Profit After Tax stands at ₹391 crores in Q1 FY'26 as compared to ₹217 crores in Q1 FY'25.
Now coming to the important ratios for Q1 FY'26, net incurred claims ratio is at 99.76%, commission ratio 8.54% of net return premium as compared to 8.49% in Q1 FY'25, expense ratio 7.86% of net return premium as compared to 11.65% in Q1 FY'25, combined ratio 116.16% compared to 116.13% in Q1 FY'25, solvency ratio 1.87 times compared to 1.83 times in Q1 FY'25, return on equity ratio is at 7.17%. With this, I come to the conclusion of my opening remarks and invite our General Manager of Finance, Ms. Mary Abraham, to provide a detailed overview of our financial performance.
Thank you, ma'am. Good afternoon, and I will just quickly take you through the financial performance of the company for quarter one, 2025-26. Next slide, please. So we had a gross written premium of 13,333.58 crores as compared to quarter one of the previous year of 11,787.92, which is a growth rate of 13.11% year-on-year. Our net incurred claim, ICR %, has increased from 95.98% to 99.76% in this quarter, and mainly because of the aviation claim, the Air India claim that we had, and also due to an increase in our health and liability claim. The operating expenses, you will see as a percentage of the net earned premium, has come down from 11.65% to 7.86%, a significant reduction, mainly driven by the negative net addition of employees.
And the combined ratio, despite the increase in the ICR percent, has remained stable at 116.16% as compared to the previous year of 116.13%. The other incomes, you will see, we have the other expenses of 145.35 crores, mainly due to the provision that we made towards the non-moving reinsurance balances and also providing for the other doubtful debts. This was an attempt to clean the books and as per our board-approved policy. So the financial results are that we have a profit after tax of 391 crores, which is an 80% increase over the PAT of quarter one for the financial year 2024-25. Next slide, please. The other slide just captures the key highlights by way of a bar chart. You have the combined ratio where we've remained almost stable, and as compared to 2024-25 also, yeah, we have kind of remained stable.
But compared to 2023-24, we have significantly come down. The gross written premium—
Oh, okay.
Just excuse me. We're on a phone call.
Oh, sorry. Yeah, I will just read out the figures as well. The combined ratio for quarter one '25-'26 is 116.16% as compared to the combined ratio for the previous year, which stood at 116.13%. So we have remained stable as far as the combined ratio is concerned. As far as the gross direct premium is concerned, as already mentioned, we have a total premium of 13,334 crores in quarter one FY '25-'26 as compared to 11,787 crores in quarter one financial year 2024-25. And this was at a growth rate of 13.11%. The investment income has increased in quarter one '25-'26. It is 2,290 crores as compared to the investment income for the previous years, which was 1,852 crores.
The profit after tax is INR 391 crores for quarter one '25-'26, which is an 80% growth over the profit after tax of the previous year, of quarter one of the previous year, which was INR 217 crores. Continuing with the other ratios, our solvency ratio is 1.87 times for quarter one '25-'26 as compared to the previous year, which was 1.83 times, which is a significant increase. Our asset under management stood at, sorry, INR 1,802 crores for the quarter one 25-26 as compared to INR 98,769 crores for quarter one 24-25. The technical reserve has increased to INR 55,789 crores in quarter one '25-'26 as compared to INR 51,638 crores in quarter one for the year '24-'25. So this just indicates the reserves that we have for our investment. Please go back to the previous slide, please. Our net worth has increased from INR 21,343 crores to INR 22,279 crores in quarter one ' 25-'26.
Fair value change account has come down from INR 26,360 crores to INR 23,416 crores, mainly due to the volatility in the equity market. And our return on equity is 7.17% for quarter one '25-'26 as compared to 4.15% for quarter one ' 24-'25. Next slide, please. Yeah, next we come to the segment-wise performance. For Fire, the quarter one figures are 2,272 crores, registering a growth of 19.95% as compared to the previous year's quarter. Marine premium stood at 300 crores as compared to 274 crores in the last year's first quarter, registering a growth of 9.48%. Motor OD premium is 1,270 crores in the current quarter, registering a growth of 6.45% over quarter one of last year. Motor TP premium is 1,415 crores, registering a growth of 3.18% as compared to the premium of quarter one of last year.
Health and PA put together is a premium of INR 6,692 crores, registering a growth of 14.15% over the premium of quarter one of last year. Crop premium is INR 126 crores with a growth rate of 0.8%. It almost remained the same as last year, and others, which comprises the other departments like engineering, aviation, miscellaneous liability put together, had a premium of INR 1,258 crores, registering a growth of 16.8% as compared to that of quarter one for the year '24-'25, and coming to.
Looks like we have the management line disconnected. Please stay connected until we have the management line reconnected again. We have the management line reconnected.
Hello?
Yeah.
Am I audible?
Yes, ma'am. Please go ahead.
Yes. So I've completed the premium segment-wise. I will take you through the incurred claims ratio segment-wise. For Fire, the incurred claims ratio stood at 11.44% as compared to 7.75% of the previous year, quarter one of the previous year. Marine, the ICR is 59.88% as compared to 55.86% in quarter one of the previous year. Motor OD, the ICR is 116.35% as compared to the previous year's quarter one figures of 114.86%. Motor TP, ICR is 105.09% as compared to quarter one figures of the previous year of 111.71%. It has come down. Health and PA has an ICR of 108.98% as compared to the previous year's figure of 105.96%. Crop registered an ICR of 94.23% as compared to 72.26% in quarter one 2024-25.
The others, the other departments, as mentioned earlier, had an ICR of 89.20% as compared to 50.79% pertaining to quarter one of financial year 2024-25. The main increase due to the overall ICR has increased mainly due to the aviation loss and some large losses in liability and miscellaneous portfolio. Motor TP loss ratio continues to remain high, though it has shown a small reduction. We have still not received any notification on the TP premium increase from MoRTH. Health segment also witnessed an increase in the incurred claim ratio. Next slide. Yeah, we now take you through the performance of New India vis-à-vis the performance of the industry. The general insurance industry grew by 8.84% in quarter one FY 2026 with a premium of INR 79,301.21 crores. This was at a growth of 8.84%, whereas New India grew at 13.33% with a premium of 12,299 point.
The mistake is 15.27. Sorry.
Oh, sorry. Sorry. Sorry. I'm extremely sorry. New India had a premium of INR 12,299.49 crores at a growth rate of 15.27%. Yeah, and the market share of New India increased to 15.51% from 14.65% of the same period last year. Thank you. Yeah, we take you through the segment-wise market share of New India. For Fire, our market share was 16.5%, where we had a premium of INR 1,857.16 crores as compared to the total market premium of INR 11,241.76 crores. For Marine, the market share was 16.2% with a premium of INR 280.68 crores as compared to the total market premium of INR 1,737.15 crores. For Motor, our market share was 9.92% with a premium of.
9.92.
9.92%, sorry, 9.92% with a premium of INR 2,302.1 crores as compared to the total market premium of INR 23,200.28 crores. For Health and PA, our market share was 18.9% with a premium of INR 6,713.35 crores as compared to the total market premium of INR 35,543.33 crores. And all the other miscellaneous departments like Crop, Credit, and other miscellaneous liability, our market share stood at 15.3% with a premium of INR 559.97 crores as compared to the market premium of INR 3,658.06 crores. And all other departments put together, our market share was 15% with a premium of INR 586.23 crores compared to the market premium of INR 3,920.63 crores. The company had in the past taken a conscious decision not to write Crop line of business directly. A few other facts about our company. We are in the 107th year of our operation, having celebrated our foundation day on the 23rd of July this year.
We are a market leader with a strong brand image. We've been rated AAA by CRISIL and B++ Good by AM Best. We have a multi-channel distribution network, and we are an Indian multinational with presence in 25 countries, including India. We have 1,665 offices in India, underlining strong domestic presence. Our segment mix. Fire accounts for 17.04%. Health and PA accounts for 50.19%. Motor TP is 10.61%. Motor OD is 10.65%. Marine is 2.51%. Crop is 0.94%. And others at 8.06%. No, that's wrong. No, that's wrong. That's wrong. 8.06%. Yeah. Then the next is on the distribution mix. Brokers, the agents account for 21.73% of our business. Brokers account for 38.8% of our business. Direct premium is 33.28%. From dealers, the percentage is 5.65%. And banc assurance accounts for 0.54%.
Our key initiatives for the year '25-'26 are launching innovative new products with focus on retail and MSMEs, growing new lines like parametric insurance, emphasis on growth in segments other than Motor and Health, where competitive intensity is high, special efforts to drive insurance penetration in the state of Gujarat and Lakshadweep under the State Insurance Plan, further impetus on risk management initiatives and enterprise risk management, and taking steps to improve our global credit rating. Key initiatives, our call center. We have call center offering key IT initiatives, our call centers offering services in seven regional languages. We have a revamped website. Our WhatsApp services are available in eight regional languages, which offer policy and claim-related services. AI and ML-enabled chatbot for customer service. Claim automation efforts continue for faster claim settlement. Customer portal offering a seamless user experience for standard products. Thank you. Yeah, the presentation is over.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Rehan Syed from Trinetra Asset Management. Please go ahead.
Good afternoon, and thank you for being with us all today. And I think Mary ma'am has cleared all the points in my opening remarks. I have left with some of the questions. So first question is on the global side. Like, will you share more on your credit-rating improvement strategy and how global rating agencies are responding towards that for going forward or what is the recent trend to the industry?
Excuse me, we are not clear what you asked. Can you repeat, please?
Sure, sure. I want to, could you share more on your credit-rating improvement strategy?
Sorry to interrupt, Mr. Rehan, may I request you use a headphone?
Oh, so I want to.
Can you try to use this microphone?
No, no, no. I have my audible. Hello, hello.
Yes. Yes, please go ahead.
Yes. So I have my first question is around, like, could you share only more on the credit-rating improvement strategy and how global rating agencies are responding towards that? Just could you just put more light on that?
Yeah, yeah, yeah. Yes, so actually, on this credit rating, we have been credit-rated by AM Best for quite some time now, and unfortunately, in the year 2018, we were downgraded to B++ from A minus excellent, and since then, we have been working consistently to see that we go up back to our A-rated status, and in that endeavor, we have been consistently trying to improve our methods, the technology usage, the kind of resilience across all parameters, risk management initiatives, employment of technology to ensure that there are no gaps. All of this we have been trying to do across the last few years, and most particularly, in the last year, we have made some significant strides in this area.
We have put controls on wherever we've had audit observations and audit paras from our statutory auditors. We have actually put our risk teams task force to address each of these unreconciled amounts. As a result of that, you can see that the last quarter and this quarter, we have taken a few of the unreconciled amounts, which are pretty old, very old balances we have written them off and so that we clean up the books permanently for the future. At the same time, to be future-ready and to ensure that such things do not repeat, we have created certain verticals within the company to address these procedural lapses so that these, because of the transactional inconsistencies and delay, these things were happening. Therefore, we have put in place to address all those gaps.
We expect that this will be a total cleanup for the future and we'll not see these kind of instances in the future. Apart from that, we have strengthened our team. We have completely done up our risk map, heat map, which was there. We have improved on it. We have taken the help of one of the big three in ensuring that we get the absolute state-of-the-art knowledge transfer, the best practices in the industry for addressing this to make best-in-class for this industry. I think there has been a significant improvement from there. We have adopted technology in a big way to ensure that these gaps, which were there in the procedures and processes, they address to a large extent.
We have seen significant improvement in the way our teams have reacted to this, the way these processes have cleaned up the account and made, brought more accountability to the table of each and every employee. The way we are able to measure TAT when it comes to claim settlement or, in fact, even for underwriting, we're able to find out where and on which table the delay is happening. These things, I think, are some things which are permanent in qualitative terms. This would bring continual rewards for this company every quarter that we go.
Okay. Okay. I'm well understanding. Thank you for such greatly the tactical also. And my second and last question is around what's the outlook for combined ratio and half for second half FY '25? Any internal targets or levers to improve with? Is there any target in the management team you have forecasting for second half FY '25 and FY '27?
Yes. So last year, we had a phenomenal year when we brought down the combined ratio from 119 to 116, which is not a mean feat to achieve for such a big entity, a global entity. So it was definitely something we really worked on in the last year. And we brought in significant change. The same things hold good this year. Additionally, this first quarter hasn't moved in terms of combined ratio because there were a few large losses that affected this particular quarter. And the one from Air India was a once-in-a-while kind of loss. And otherwise, possibly, we could have seen a traction there also.
But going forward, and I think the kind of initiatives we are taking, we are very, very sure that internally, we have set ourselves improvement in combined ratio by another 3% this year, which I think should be achievable at the current point of time.
Okay. Okay. Well, thank you, Mrs. Subramanian , and good luck for the coming quarter.
Thank you.
Thank you. The next question is from the line of Aditi Joshi from JPMorgan. Please go ahead.
Yeah. Thanks for taking my question. Just on the loss ratio side, just now you said that the first quarter could have been better if it was not for the Air India losses. But if I look at the incurred loss ratio across the business line, it has broadly shot up in almost every category. So just firstly, with respect to the health insurance, actually, I wanted to understand what is your outlook for the rest of the year, especially given that we have taken some pricing hike and also cautious underwriting approach in that segment. And also in the motor insurance side, now that the third-party premium hike has not come, so what is your outlook for the motor TP loss ratio as well?
If you're able to guide your total group-level loss ratio for the rest of the year, that will be helpful.
Yes. This quarter, as you rightly said, the fire loss ratio has, I mean, 11.44 is pretty low. And I think this is a natural case when we write new risks and you have different exposures here. And you can say that this quarter, it has gone up, but then that's still not very alarming. When it comes to marine, it is just a 4% increase. The major ones are, I think, in health, as you rightly said, from 105 to 108. And mainly, this has happened because of medical inflation, which is currently at 14%-15%. And as we have been telling to all agencies across the year, that a large part of the medical insurance service that we give our policyholders is unregulated, which is the hospitals.
As long as hospitals in each and every tier of city doesn't get onto a cashless system where we are able to prefix or predetermine the rates, this kind of inconsistency is going to keep happening. Even though our underwriting processes have changed over the years, we have brought in a lot of stringency. There is a committee-based approval for every group medical business that is written in New India. We peg the prices much higher based on the loss ratios that have happened. Despite the competition, we either let go of the business that we are not able to demand or get the price for. When we write, we write at a sufficient increase so that we are able to absorb that level of loss ratio. But then always, the hospitals, they beat us at this game.
And therefore, you can see that increase. And I'm sure that once with a lot of concerted effort from GI councils, from all of us, there's a lot of concern shown by the DFS, especially on health, because it's a service that we give to the citizens of this country. And therefore, I think it's not going to be too far when the health ministry also does something about it when we have all the hospitals regulated in the country. And that is the golden letter day for health insurance in India. And we'll be surely on top of the charts to give that kind of service for our policyholders. And we have this additional regulation where we can't increase more than 10% in a year. So our hands are tied at beyond 10%. When we can't increase, the inflation is at 14%.
We have a straight 4% differential there itself, and then this is also this quarter, the hike is also because of an increase in infectious diseases, as you would have read in the press. Additionally, there has been a lot of regulatory change in health, which is very evolving, and there are a lot of circulars that keep coming throughout the year when some of the latest ones include the inclusion of pre-existing diseases, and that is also one of the reasons, and there is a new concept called robotic surgery, which is being increasingly used by customers, and this is something that has possibly not been priced for or taken into account during the pricing, and because of these various reasons, claim has shot up by 3%, which is pretty decent.
Okay. So just to summarize that, the pricing hike that we actually took in the last year, I think the impact of those hikes has largely translated into the loss ratios. And now that going forward, it will largely be the function of claim frequency as well as the amount. Is that correct too?
Yeah.
Is my understanding correct?
Yeah. See, this price gap of 10% came somewhere in the middle of last year when there was a lot of hue and cry about retail premiums not being affordable by the larger public. So actually, the health, we have been I mean, even earlier to that, we have been extremely our increase in rates has not been on an every-year basis. So we did change the rate applicable age-wise instead of band-wise. And that has somehow maybe spread that kind of increase in premium across each year. But then the retail premium growth has largely come from all segments, whether it's retail, GMC, government. We have increased the premiums even in government business by 20% basis. The ICR on GMC, our prices have gone up by 14%, in retail by 9%.
But despite that, the claim ratio has gone up, which again reaffirms the fact that it is the service provider that now needs to be reined in.
Okay. Got it. And just moving to the motor insurance, given that we did not have a motor third-party hike, so how to think about the incurred claims ratio in that segment?
Yeah. See, in motor TP, basically, it is a mandated class we can't refuse. So whoever comes, we have to give them the cover. Here, you can see a slight decrease because we have changed our priority in terms of the segmentation under motor, wherein we have overall, we have a private car distribution, 47%, the commercial vehicles at 45%, and the two-wheelers at 8%. In the TP, we have a private car only of 34%, a commercial vehicle exposure of around 56%, and the two-wheeler at 10%. So this is where the issue happens for the TP, wherein the price has not gone up, and it's not in our control either. So there, we have re-engineered our workforce to try and change our portfolio mix more in the favor of private car.
In the first quarter, I think the response can be seen here in terms of the ICR decrease from 111 to 105%. As far as the motor OD is concerned, yes, this is mainly because of the strengthening on reserves. Because earlier year also, we had this.
TP.
TP. Yeah. In TP, we have strengthened the reserves last year. That's why the ICR was at 111%. This year, it is normal business as usual. And therefore, that is also one of the reasons why it is at 105%. Now, the OD thing has gone up because this is mainly because of the OEMs and the dealers who demand a huge outgo because of which we are not able to. It's a very competitive segment. It's huge competition in this area. And when we do not get the businesses that are given away at a very high commission, then this kind of impact is bound to be seen. We have done some kind of dynamic strategy for each of the geographies that we operate on, which is right now a work in progress.
Maybe in the next quarter or quarter after that, you may be able to see an improved performance on OD, which needs to be monitored on a daily basis. This is something we are doing right now. I think the results will be seen a quarter later.
Okay. Got it. That's helpful. Thank you.
Thank you. The next question is from the line of Shobhit Sharma from HDFC Securities Limited. Please go ahead.
Yeah. Hi. Thanks for the opportunity. So I have a few questions around the other OpEx. So if you look at the policyholder account, there is a steep decline in the other OpEx. On the other side, if you look at the shareholders' account, there is a steep increase. So is there some recategorization which has happened over there? Hello?
Yeah. We are here. Actually, we'll be answering the question.
The reason why the operating expenses have gone down is strictly because the employee costs have gone down. The number of employees have actually reduced, and correspondingly, we also had a lesser impact on account of the pension liabilities last year, and the same trend continues this year, so that has actually resulted in the operating expenses gone down. Recategorization.
Sorry to interrupt. So my question was on other OpEx. Employee remuneration, I got that. Can you help us understand around the other OpEx piece, please?
Yeah. On the other OpEx, of course, recategorization-wise, we had moved some of the provisions that we were making are actually getting into the revenue account. But there was a change of policy, and they are now moving into the P&L account.
Okay. And there is a steep increase in terms of the other income which we have recognized during the period. Is this sustainable, and what does it relate to?
This is the provision that we've created. If you're talking about the -INR 145 crores, the provision that we've created for the non-moving reinsurance balances and towards the doubtful debts. So this was done with the main intention of cleaning our books and keeping in line.
I'm referring to the other income of around 200-odd crores in the.
It's a combination. We had another income, what you're talking about, to the INR 202 crores of other income, which is the. So there is a combination of two, three things. Actually, as per our accounting policy, some of the old balances, we have taken a call of making provisions as well as so there will be non-moving balances which are appearing on both sides. Some need to be provided, and some needs to be written back. So whatever is written back has been put in the form of other income, and whatever is written off is put in the form of the provisions. So if you see, the net impact is around 145 crores negative.
Okay. Got it. Now, coming on to the business side, ma'am, can you help us understand our approach on the long-term motor policies and how much business does this segment contribute to our top line right now?
Long-term motor policy, we have launched recently, but as of now, the proportion is on the lower side. But going forward, if you get a right price, we will be open to doing long-term OD policies even on the OEM side, actually.
Okay. Ma'am, now coming on to the health side. So last time, you had highlighted that on the retail health side, we have seen a 10% improvement in terms of the loss ratio. And you had attributed that to the increase in the claim investigation, which was around 34% for 25. So can you help us with the same number for this current quarter? How are we progressing on the claim investigation, the efficiencies on the claim side? And if you can split your health loss ratios in terms of retail, group health, employer-employee, and the government, that would be helpful.
Hello.
Yeah. Good afternoon, sir. As per retail income, last year, we had done 30% in-house audit by our in-house doctors. The current year, the target has been fixed as 50% of audit of all the claims of retail and also group health. So surely, we are also planning to introduce the FWA tool also, the in-house tool, even though other TP has got in-house tools. We are also trying to introduce.
ICR.
So then last year, ICR was 87%. In health, there was a 3% increase, mostly with respect to the infectious disease during this period. Always, the first quarter, there will be some increase in the ICR as far as the health department is concerned. Then one more aspect is some of the big accounts where we used to pay the single premium or lump sum. So that also.
Sir, if I heard you correctly, you mentioned that sorry, ma'am.
The ICR has gone up slightly this quarter as compared to last year because of increased incidence of infectious diseases, because of which there's a lot more hospitalization than earlier. This is something that's beyond our control. And as he explained, the number of audits has gone up from 30% to 50% because we are recruiting 50 more direct recruit doctors into our force. We already have 75 last year. We are adding another 50. So this also proves the amount of we are going to drill down into this entire claims process for health. We are also building right now a customized fraud, waste, and abuse tool that will help us to detect which hospital charges how much for which treatment and where is the leakage.
Hello. Ladies and gentlemen, we have the management line disconnected. Please reconnect and reconnect the management. We have the management line reconnected. Please go ahead.
Yeah, so can you hear me?
Yes, ma'am.
Yeah, so as I just said, now the audits have gone up. The tools, the technology is being utilized. Even otherwise, earlier, the TPs used to use their own tools. We also had an in-house tool that we used to use, but we are recustomizing the entire thing because I think there are so many other parameters that we feel we could monitor even more strongly, and we want to see that every case is, as far as possible, we get for a 100% audit, so we are trying to move towards that, and in that endeavor, we are now building our own tool, and we are going to see that this is monitored even more closely, and I'm sure that with all these efforts because the first quarter is always the health ICR is always high.
With these efforts, I'm sure that by the end of the year, we'll bring down the overall ICR for the year to a much better number than what it was last year.
Okay. Ma'am, is there any thought around bringing in the health claim settlement on the health side in-house?
No. It is not possible with the level of the volumes that we have at the moment. So this year, we will be still not having any complete in-house settlement. But we do have TPs. We have a government TP that does an audit of the other TPs. So all these systems are there, and I don't see that we're going to have any in-house TP. It's a very big thing. It takes at least two, three years to adopt one, and then especially in a PSU outfit, and then make them ready to take on this kind of an initiative. It's kind of a parallel vertical, which will require investment of 400-500 personnel present all across the country, all of that. So it's a totally different initiative that needs to be thought about.
And till then, we'll have to see how much we can bring in efficiencies by way of technology. I think we are trying to adopt technology as a way we could even supervise the external TPs and see that there is no leakage from their side. And there is also this parallel initiative of hospitals coming on board on the NHCX system. And cashless being the way forward, once that happens, this system, the ecosystem will really, really improve in a much better way. And once it's cashless, everything is recorded. There is a database created wherein claims are there. Fraud detection is much more easy than before. So I think the whole industry is working towards it. It's just a matter of time.
Okay. Ma'am, just one thing which I wanted to understand. Generally, we believe that the GIPSA pricing arrangement which you have with the PSU insurance health, it gives them a leeway of around 20%-25% lower claim size. Is that true, or is this something else? Can you help us understand about the GIPSA arrangement?
No, no. It's totally untrue. GIPSA is just an association that does a common communication between the DFS owners and the other companies that are the members of GIPSA. Beyond that, there is no other great efficiency we get by being a GIPSA company. We are competitors in our own right in the market. And we, of course, are governed by the DFS who are our owners. And even here, the thing is we are deeply regulated where health is concerned. We have regular reviews on health, especially on group health, wherein the loss ratios have gone bad a couple of years ago. And since then, we have been deeply regulated. Our owners, they are fully aware of the health insurance ecosystem, how it works. So we are reviewed on every aspect of health insurance very strictly. And therefore, we are answerable and accountable for everything we do here.
So therefore, I think we cannot take an independent call vis-à-vis the private sector that does have a lot of liberty to take many calls on many things.
Okay, ma'am. Got it. Thank you and all the best.
Thanks.
Thank you. The next question is from the line of Nitesh from Investec. Please go ahead.
Thanks for the opportunity. First question is, can you share the incurred loss ratio for the retail health segment for quarter one?
90%.
It's 90%.
90%.
Yeah.
Okay. So second is, in your opinion, what is the possibility of motor TP price hike this financial year, or we should completely rule it out?
No. I mean, that is what. So we have no clue whether it will get increased this year. Our hope and prayers are for that because in this endeavor, I think GI Council has worked a lot throughout the last year. And several representations have gone. I myself have been a part of one of the meetings when we met the MoRTH, and we had these discussions with them. And at that point of time, we did feel that something surely would come out. If not in the same format, the pricing would definitely undergo some more segmentation, and it would come. But I think right now, that is still not happening. And right now, we have no clue whether it will come out in a month's time, few months' time. We have no clue, actually.
Sure. And the last question is that we are witnessing now competitive intensity from other PSU entities in the motor own damage segment. And we are seeing a bit of irrational pricing. So what is driving that? The balance sheet position of other PSUs is not that strong. So what is actually driving this? And this will all end negatively for them over medium term. But what is making them so competitive in the near term?
Yeah. I've not been in a position to comment on any other organization.
Okay. Okay. Thank you. Thank you. That's it from my side. Thank you.
Thank you so much.
Thank you. The next question is from the line of Aditi Joshi from JPMorgan. Please go ahead.
Thanks for the opportunity again. Just a couple of follow-up questions. The first one on the fire insurance, the growth was pretty decent in terms of the premiums. So just want to understand how is the competitive intensity and the pricing environment looking, and what is the outlook going forward under the fire segment for the rest of the year? And second, if you are able to provide your guidance on the combined ratio for FY 2026, that will be actually helpful. Thank you.
Yeah. So fire insurance has been New India's forte. We've been the leaders all along. We continue to be, and we will surely be in the future also. We are the largest insurer for the large risk segment, which is, I mean, we have been the leaders, and it's always the insurer of choice for most of the large risk owners to go with New India. And so it's no surprise that we've done so well. But that apart, the main reason for the increase is because the last year had witnessed a deep decrease in pricing in fire from the months of May to December when the pricing discounts were in the range of 90 plus. And that is the discounting. When we talk about it, it is from the IIB pricing that was prevalent in the market before that.
Now, since there is no tariff in the market, IIB pricing was something that was adopted by the market, and then they decided not to go with it. And therefore, it dived down. And then after that, I think because this is a heavily reinsurance-driven line of business, and therefore, the reinsurers had to step in and warn each one of the insurers that they would take off the reinsurance protection from 1st April. So once they did that, the market quickly got back into discipline from 1st January and started quoting better rates, at least in line with the loss ratios in the segment. And therefore, there was definitely when you see an 80%-90% discount, then obviously when you recorrect and then you see something closer to reality, you are bound to see a decent 20% growth.
And that is one of the reasons that the growth is at 19.95%. But apart from that, New India has acquired a couple of new clients. We are very proud about them to have them with us. And I'm sure that this growth will be there going into the future also because these are reinsurance-driven lines. As long as reinsurers maintain leash on capacity, this will continue to grow.
On the Combined Ratio guidance for the year?
Yes. Combined Ratio guidance, I already said that we are aspiring to have a Combined Ratio 3% lower than 116, which would be around 113 maybe for this year.
Okay. Got it. Thank you so much.
Thank you. Thank you very much. Ladies and gentlemen, that was the last question. And I hand the conference over to Mrs. Girija Subramanian, CMD, New India Assurance Company Limited, for closing comments.
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