Chennai, Feb 7 (IANS): Murugappa group’s multi-line insurer Cholamandalam MS General Insurance Company Ltd targets to close this fiscal with a gross premium of about Rs 7,700 crore, a top company official said on Wednesday.
The company will raise Rs 100 crore as tier 2 capital in the immediate future, Managing Director V. Suryanarayanan told reporters here.
He also said the company will be expanding other lines of business so that the premium from the motor insurance is brought down to 60 per cent and to 55 per cent over a period of time from the current 63.8 per cent.
The insurer - a 60:40 joint venture between the city-based Murugappa Group and Japan’s Mitsui Sumitomo Insurance Company Ltd - is already rejigging its motor insurance portfolio by increasing passenger vehicles business while cutting down the commercial vehicle business.
Suryanarayanan said the company has earned a gross premium of about Rs 5,578 crore (including inward reinsurance premium) till December 2023 this fiscal, up from Rs.4,424 crore earned during the previous year's corresponding period, and may close this fiscal with a gross premium of about Rs 7,700 crore.
As regards the bottom line for the year, he said it will be good if the underwriting loss (simply put premium income minus claims outgo) is held at the December 2023 levels of Rs 462 crore (FY23 9 month period Rs 475 crore).
Last fiscal, the company’s underwriting loss was Rs 601 crore. During the current fiscal, the company’s claims experience due to catastrophic events like flood, cyclone and others in various parts of the country was Rs 304 crore on gross basis and Rs 54 crore net of reinsurance claims.
Cholamandalam MS General has posted an after tax profit of Rs 264 crore till December 2023 as against Rs 116 crore logged during the corresponding period of the previous year. In the first nine months of this fiscal, Cholamandalam MS General has earned an investment income of Rs 816 crore up from Rs 631 crore earned during the nine month period the previous fiscal.
Queried about looking at acquisitions as the Murugappa Group being acquisitive in the recent times in other lines of business, Suryanarayanan said the financial services business should grow organically.