New India Assurance works to tighten underwriting, risk controls

However, its balance sheet remains exposed to potential volatility.

AM Best expects the New India Assurance Company’s balance sheet strength, assessed as very strong, to remain robust in the medium term.

The companies’ balance sheet was underpinned by risk-adjusted capitalisation at the strongest level as of the fiscal year ending March 2024, according to Best’s Capital Adequacy Ratio (BCAR). 

The company benefits from a well-rated investment portfolio, largely composed of domestic government and corporate bonds. 

However, its balance sheet remains exposed to potential volatility from its allocation to domestic equity investments.  

New India's operating performance is expected to remain adequate but constrained by challenging market conditions. 

The company has recorded an average return on equity of 2.9% over the past five fiscal years, driven by stable investment income. 

Whilst overall results are expected to remain profitable, underwriting performance is likely to face pressure from continued claims in health and motor insurance and exposure to catastrophe losses, despite ongoing remedial measures.

Enterprise risk management (ERM) remains a key area for improvement. 

Whilst New India has made progress in addressing some audit-related issues and strengthening internal controls, gaps persist, particularly in underwriting risk management and pricing discipline. 

These challenges are expected to continue influencing the company’s ability to fully align its risk management framework with global standards over the medium term.  

Despite these constraints, New India’s stable outlook reflects expectations of continued profitability and strong capitalisation, supported by its market leadership and investment performance.