The New India Assurance Company’s financial performance is expected to remain adequate, with a strong balance sheet and a top-notch capital adequacy ratio. According to AM Best, the company’s balance sheet is underpinned by its risk-adjusted capitalisation at the strongest level, with a well-rated investment portfolio mainly composed of domestic government and corporate bonds. However, its balance sheet is still exposed to potential volatility due to its allocation to domestic equity investments.
The company’s operating performance is expected to face challenges from declining underwriting results due to continued claims in health and motor insurance and exposure to catastrophe losses. Despite this, New India’s return on equity has remained stable at 2.9% over the past five years, driven by stable investment income. The company’s enterprise risk management (ERM) remains a key area for improvement, with gaps persisting in underwriting risk management and pricing discipline. These challenges are expected to continue impacting the company’s ability to fully align its risk management framework with global standards in the medium term.
Despite these constraints, New India’s stability outlook reflects expectations of continued profitability and strong capitalisation, driven by its market leadership and investment performance. Overall, while the company faces challenges, its strong capitalisation and investment performance ensure that it remains a stable player in the insurance industry.