The New India Assurance Company Limited analyst Q&A

We will now begin the question-and-answer session. The first question is from the line of Rachna K from Simple.

Hello, thank you for the opportunity. A few data and business-related questions. First, has the reserve release in place?

Yes, my question was, has the IBNR reserve release, which has seen a decline from, you know, Rs. 547 crore to around Rs. 85 crore, has that also resulted into a decline in claims ratio? Or how should I read this? This is my first question.

Yes, I can answer that question. There is no particular decline per se as far as the core lines like Motor Third Party are concerned. However, what happens is there are lines like CROP, where initially you set aside reserve in the form of IBNR and later when the claims are actually either paid out, the correspondingly IBNR comes down. So, in this quarter, we did see quite a lot of payments on our CROP business which led to a reduction of IBNR. So, if you exclude CROP, there has been, the IBNR estimates has been pretty consistent with what it was during the first half. And there is no specific release per se as far as the results are concerned.

Okay/ understood. My second question is on the investment book. We see the investment book has not grown so much. It has grown only by 3%. But if we see our investment income and yield 'ef Rai SRa HaTH&qq$TMSThe New India Assurance Co. Ltd of investment, they have improved quite a lot year on year. So, if you could provide some colour on that piece as well? Ms. Chandra lyer: So, the yield has increased because of what Mary Madam has mentioned during the presentation. We have sold some bit of equity to realize profit and that is why the overall income on investment has increased. This is a one-time thing which is done for accommodating the wage revision expense.

Okay, and on investment book, if you could provide some colour? Ms. Chandra lyer: About ? Sorry!

The growth on Investment Book? Ms. Chandra lyer: Yes, because we have sold like I just mentioned, so accordingly to some extent it has come down. The value, investment book value has not grown to the extent that would have been there in previous quarters.

Thank you. The next question is from the line ofShobhit Sharma from HDFC Securities Limited. Please go ahead.

So, Madam, my first question is on the growth side. So, if I look at on the Motor side, though you have mentioned that we are recalibrating our portfolio and because of which we have slowed down. So, can you help us understand how long it will take to stabilize and how should we see the growth trajectory from next year onwards? And if you can give us some colour on the composition of our Motor portfolio between the private car, two-wheeler and commercial vehicle, how it has moved and what changes we have incorporated. If you can give some numbers around it, that would be helpful? And lastly, on the Motor side of the business, if you can give us some composition in terms of the business which we have sourced in the form of new vehicles and old vehicles that would be helpful? Why I wanted to know this is because on the health side, though we have taken a number of measures, the result on the loss ratio is quite visible. But on the Motor side/ though I understand TP is a long tail, but on the OD side, ideally it should be visible if you have taken that kind of stance.

Thank you, Shobhit, for your question. So, the growth on Motor is a little dented because of very strategic and very well-thought-out solutions for these loss-making accounts that we have been suffering from in Motor. So, definitely because of us exiting from many of these segments in Motor, wherever we found the losses exceptionally harsh, growth has come down and this will continue for some time. Maybe we are trying to work with new dealers and new partnerships. I think with that coming, we should be able to make up for this growth in the next couple of quarters and at least it will show an upward trend is what we feel. And the composition as of now is 46% in private cars, 47% in commercial vehicles, and the rest in two-wheelers. So basically, this particular restructuring also, I think we will try to work towards a better composition on private car and more than the other two. So, we are working towards a better composition on private car and going forward, I think in a couple of quarters, we should be showing some positive growth and profitability and reduction in ICR at least,

Just a follow-up on this. Can you tell us how this mix on the private car and two-wheeler and CV, how this mix has evolved over the last couple of Quarters or maybe last year, how we ended and where we are right now?

So, on the commercial vehicles, I think we had more on commercial vehicles earlier and private car was definitely less than 47%. Now, I think we have increased the share on private cars and commercial vehicles has come down slightly. The two-wheelers have by and large remained where it was. So, in commercial vehicles also, we have restricted underwriting on those greater than 40,000 GVW vehicles. And there I feel, because we have stayed away from those riskier segments, there also there will be a turnaround that we will see in the next few quarters.

Any kind of benefit which you have seen on your portfolio because of the GST rationalization over the last Quarter, on the motor side specifically?

Motor side, actually the private car growth is there in the private car segment because of the GST rationalization. And I think that will continue and because quarter on quarter as we grow1 we will see the growth in premium also because of that.

Okay, thank you. Madam, another question is on the wage cost. In the notes to accountf the wage cost arrears which is mentioned is around Rs. 1,500 crore impact for the nine-month period. But the press release mentioned it is somewhere around Rs. 2/500 odd crore. so/ can you help us clarify that? And lastly, on the wage cost you have mentioned that there is a family pension revision which has happened up to 30% of the cost. So can you give us some number/ how this cost would be and what kind of impact this number can have? Will it be this large like we have seen the arrears?

So actually, the wage revision calculation is around Rs, 2,500 crore on the whole, For the revenue account, it is around Rs. 1,677 crore which comes to the in-service employees. And for the arrears that have to be paid to them from August 2022. But the rest of it, that is around Rs 642 crore on account of arrears that are payable to our retired employees. And that has been taken to the profit and loss account. So, this is the breakup. And as far as the FPS is concerned/ 30% that is not yet been, that is from the date the notification comes through. Therefore, it NEW INDIA ASSURANCE©: Ral SPga@aTndqq$TMS has not been incEuded here. And that would be roughly around Rs. 700 crore - Rs. 800 crore So that should complete the whole thing for us as far as wage revision is concerned.

Madam, anything on the arrear side is yet to be provided in our books or we have taken entire impact in the 9 months period?

No. We will have to provide for this Rs. 700 crore – Rs. 800 crore, around that amount for the FPS in the last Quarter. Because it cannot be done before the notification comes out. Notification is yet to come out

So only the FPS portion is pending, for provision because of the gadget notification?

Yeah, that is prospective. That is why it has not been taken into account.

Okay. Now coming to your investment book, we have seen a significantly higher realization. You mentioned it was to offset the impact of the wage cost revision. So, can you help us understand how much gains we have realized during the 9 months and the current Quarter and how should we think about it going forward as well?

So, the profit on sale that we have realized is around Rs. 4,236 crore. And of this, Rs. 2,000 crore is pertaining specifically to the wage revision provision. So, the balance is our regular trading activity, buy and sell activities according to the turning of the portfolio

Madam, how much of this was accounted for, in the third Quarter?

It is entirely accounted in the third Quarter

And what is this number for 9 months period?

For the Quarter, Sir, it is around Rs. 2,000 crore from special activities.

No, 1 think he is asking what is the amount which is in this quarter, Q3?

it is around Rs. 1,080 crore in all, total from equity.

Yeah, Rs. 1,080 crores from profit on sale of equity in the 3'd Quarter and overall, it is for up to the third Quarter, it is Rs. 4,200 crore.

How should we think about it? Yeah, this is what I was asking. How should we think about it, let us say for FY2027? Because if we are able to provide that FPS again in the fourth Quarter, let us say. So how should we think about it, our investment book? We will maintain that Rs, 2,000 odd crore kind of run rate on the gain side? {} Nm INDIA ASSURANCE i Ral#gaMTn&qqMRag!

Yes, sir. Our normal sale activity would be around Rs. 700 crore – Rs. 800 crore in the Quarter plus the additional that is required to set off the wage revision provision which will be known once the notification comes and when will be the provision is required to be made, we will be planning accordingly. Depending on what is our income that we have already generated from all our entire portfolio up to that point of time

Madam, one of your portfolio companies wherein you have a significant holding has just gotten SEBI approval for IPO. Do we have a plan to participate in the IPO for that?

That is in the future, so we will look into it when it comes up.

Okay Madam, lastly on the taxation side, we have not seen anything provided for, in terms of the income tax on to your P&l for the 9 months. So can you help us understand why is it so and how should we think about it going forward?

No, this is because the advance tax is being paid, so because of that we do not need to. I mean we are paying adequately; advance tax is being paid and that is why we are not providing for it. Plus, the write-offs that we have been doing on the bad debts as per our board approved policy, that has also given us some relief and some cushioning because of which our tax has come down.

So, Madam for this Financial Year, should we assume a negligible tax rate for you?

Yes.

And what should be your long-term tax rate going forward from FY27 onwards?

It should be 17.42%, this is the MAT tax rate

Okay, Madam. And lastly, coming on to the health side...

Sorry to interrupt Mr. Sharma. Please rejoin the queue for more questions.

Sure, Thank you and all the best.

Yes, thank you. Ladies and gentlemen, a reminder to all, if you wish to ask a question, please press ’*’ and '1’. The next question is from the line of Pawan Sachdev, an individual investor. Please go ahead

Hello. I hope I am audible. Thank you for this opportunity. My question is, which segment contributed most to the improvement in the Incurred Claim Ratio in this Quarter? And it would be helpful if you quantify your evaluation. Page 1 1 of 16 @ Nm iNDIA ASSURANCE ! Ral$P5aTaqjaR dq4QTR& i The New India Assurance Co. Ltd !

What did you ask? Which is the segment that

Which segment contributed most to the improvement in the Incurred Claim Ratio?

It is the health segment. The health segment contributed immensely to the improvement because it forms around 48% of our book and the Incurred Claim Ratio has come down by 2 percentage points up to 9 months. And for the Quarter, it has come down quite drastically from 103% to 91%

Okay, and this 91% of our Net Incurred Claim Ratio, is it sustainable on a run rate basis from now on?

It is. We are working towards a strategy where the group GMC accounts are concerned. We are either pricing them and negotiating to get closer to the core right price or we are exiting from GMCs that do not give us adequate pricing and going for accounts where pricing is more fair and more adequate. Apart from that, we have increased our anti-fraud activities. Like, we have increased inspections from 30% to 50% compulsorily and we will be increasing it even more in the Quarters to come. We have got our own doctors. We are on the way of hiring new doctors. So, this activity will go on intensifying. We are on the threshold of buying a new software for fraud analysis and already the vendor selection process is on and I think in 3-4 months’ time we would be able to bring in that fraud monitoring software which would make this entire activity even more automated. And I think therefore the sustenance of this model is going to definitely be there, going forward.

Okay, understood. And can you comment on run rate loss ratio and motor and health excluding one-off and CAT losses?

On Health, we are aiming towards the loss ratio of around 98% - 100% overall. And for Motor also, we are trying to bring the loss ratio to around 103% - 104%.

Just one last question from my side. How has market share trended across Motor, Health and Non-Motor segment in Q3? And where do you see the strongest competitive positioned?

We have done well on the market share side wherein I think we have like FIRE, MARINE, everywhere we are 17% - 18% market share including Health and PA which is a very big portfolio. And with the SAHI companies being there, even that we have managed around 16.44%, which is quite creditable. Going forward, we see a similar kind of market share across these segments. Maybe in the others, like in the miscellaneous side we expect to see more market share in the miscellaneous side, SME and Parametric and such others.

Thank you. The next question is from the line of Tanya Kothari from AUM Capital Private Limited. Please go ahead.

Yeah. Good afternoon to the management team and thank you for the detailed presentation. I just have a couple of questions. The company has provided around Rs. 2026 crore towards wage revision this Quarter including Rs. 824 crore for retired employees. Is this provision now fully reflective of the expected liability or investors should wait for further adjustments?

it is already provided for completely, except for FPS. The FPS is one thing which as we clarified that is going to be taken care of in the last Quarter but all other things are already provided for till this, Q3 is already completely provided for; there is going to be no enhancement here.

And my second question is, management indicated focus in segment beyond Motor and Health due to competitive intensity. So which segments in Fire, Marine and Engineering can deliver profitable growth and what is your medium-term next target?

Fire has always been our mainstay and we have been leading this market in FIRE and continue to do that and Fire is an area where we are definitely ahead of the market and we will continue to be there. Marine is an area where New India has traditionally been leading especially in Marine. We will continue to do that and only for this quarter I think because of a couple of unusual losses we have had this loss numbers. Otherwise, Marine has also been performing quite well for us. As far as the Health and PA, the risk selection, the fraud monitoring exercise that we have, strategy that we have employed has paid off for us as we can see and we will continue on the same lines. And for the others where we have a miscellaneous and other lines like parametric, surety, we already are leading the market and we will continue to have this major presence in the market and continue to have our mainstay there.

Madam/ despite a strong PAT growth, ROE remains modest at around 5%. What are the key levers management is focusing on to structurally improve ROE whether it is underwriting discipline or expense control or capital efficiency?

So basically, all of these parameters have contributed to this growth. Actually, we will elaborate on that.

Coming to ROE, right now it is in the single digit. The focus is to bring it up to the double digits and the primary lever will be to reduce the ICR. The results are quite sensitive to the swings in ICR with every percentage improvement creating quite a substantial improvement in the PAT. So, the aim is to improve the ICR in order to increase the profitability and thereby increase ROE. So, the first goal is to reach double digit ROE.

Okay. Sir/ the budget did not include major direct support for the General Insurance sector though it introduced a tax abstention on interest awarded in Motor accident claims. So, do you () ; NEW INDIA ASSURANCE RRj$PgaawhTn&qq 8TMSThe New India Assurance Co. Ltd view this change in the broader policy environment for General Insurance in the budget especially in terms of improving penetration, competitiveness or the pricing dynamics?

So basically, New India has declared this year as the year of SME. And we are totally committed to see that we are abEe to give support to the large population of SMEs which form around 1.6 crore. And we want to see that we are absolutely in line with the government's intention to see that they are financially included. And the budget that has given now so many enablement for the MSME sector. So, this opens up a lot of insurance opportunities for us where credit is concerned, where overall protection for the SME is concerned. And also the expansion into tier 2, tier 3 cities. So, I think all of this will contribute to New India expanding its book on MSME. And already we are actively engaging in awareness programs for MSMEs across the country. We are liasoning with agencies like Dun & Bradstreet, ET Now and such media agencies to ensure that we have these shows where we bring in a lot of awareness for MSMEs. The MSME book has also grown by 36% up to November 2025. And we know that this is going to grow in the months to come.

Okay Madam, thank you so much. Thank you.

Thank you. The next question is from the line of Harsh Jain, an individual investor. Please go ahead

Hello. Thanks for the opportunity, Madam. So, I have few questions. The first will be on the segmental wise performance. So, can you throw some light on your segmental performance especially on your other businesses? Because if you see we have de-grown by 26% on Quarter- on-Quarter basis. So, what exactly happened in this Quarter where we declined 26% that much?

Crop insurance, mainly because of Crop Insurance. We have de-grown by 26%. That is in the other segment. That is mainly because of Crop Insurance. Basically, we do not write Crop on a Direct basis in the market. We used to write Crop as a reinsurer for Agriculture Insurance Corporation. This year because of some regulatory issues, Agriculture Insurance could not seed the business on a reinsurance basis and therefore there we have de-grown significantly.

Just to put some numbers. The others include both Crop and the miscellaneous segment. Crop, the premium has come down from Rs. 180 crore last year same Quarter to Rs. 5.7 crore. Whereas in the miscellaneous others segment, which is a focus area, the premium has gone up from Rs. 246 crore to Rs. 309 crore which is an increase of close to 26%. So, because Crop premium came down, overall basis you are seeing this number as minus 26. Otherwise, if you see within that, excluding crop the business has grown by 26%.

Yes, without the impact of the wage revision, the COR for the Quarter would have been 110.13% as compared to 117.98% which is including the wage revision, this is for the Quarter. And up to the Quarter with the wage revision,the COR was 124% and without the wage revision provision it would have been 117.6%.

Okay, and my last question is on your new business. You are entering into new business line for Parametric. So, can you just give me some road map or what are your plans and what we are currently standing at, some numbers, maybe? Some ball park numbers or something,

Yes, so basically Parametric Insurance is a new type of insurance which will take time to pick up in India because it is not exactly on the principles of insurance like wherein there is a threshold fixed for a particular weather-related peril and once the threshold is breached then everything from ground up is paid. So, whether the person suffers from a loss or not, it is paid. So, this involves a lot of active collaboration with FinTech companies, InsureTech companies who understand weather related perils, who understand the kind of portfolio that we are insuring and then they are able to fix up a threshold in a way that it is not an everyday issue, it is not an everyday loss. So, basically this is something that is slowly picked up. We have done some 10 or 12 contracts till now but I think the days to come, this is being sought after, both from a penetration agenda because the government wants that penetration gets done faster and quicker and Parametric ensures that penetration can be done faster because it is possible to issue policies for a large number of people at one go from a digital interface and also to settle claims in no time through the digital interface wherein people get paid the claims in hours, in minutes. So, this is something wherein the claim reaches the insured within a few hours of the catastrophe whereas the normal claim procedure takes a lot of time, lot of processing and all of that. So, this is something that eases the whole burden of claim processing and therefore this is going to be one of the very happening lines of businesses going forward. But as of now since it is yet to develop, it is slow. So, as I said that though the pickup is not very fast but it is one of the most sought-after products people wanting to know more and more about it, many people going for it also and therefore we see a very big traction for this in the coming year itself.

Okay, thank you. That is all from my side.

Thank you very much. Ladies and gentlemen that was the last question. I now hand the conference over to Mrs. Girija Subramanian - Chairman cum Managing Director, New India Insurance Company Limited for closing comments. Over to you Madam.

Thank you. Before we conclude, I would like to extend my sincere gratitude to all our stakeholders for joining us today and for your continued confidence in New India Assurance Your support plays an important role in strengthening our resolve to uphold the highest standards of service, governance and operational excellence. I would also like to acknowledge the unwavering commitment of our employees across India and our overseas offices. Their NEW INDIA ASSURANCE© RR{Se5neHhTH&qqMt5The New India Assurance Co. Ltd dedication and professionalism continue to be the backbone of this institution enabling us to serve millions of customers with consistency and care. Most importantly, we remain deeply grateful to our policyholders who have placed their trust in New India Assurance for over 106 years. Their confidence inspires us to continually improve, innovate and deliver on our promises with sincerity and accountability. As we move forward, the management team and I reaffirm our commitment to sustainable growth, prudent risk management and consistently enhancing our service standards. We will continue to work towards strengthening our operational capabilities, enhancing our digital initiatives and contributing meaningfully to the development of the insurance sector and the broader economy. Thank you once again for your time and participation. We look forward to your continued engagement.