The New India Assurance Company Limited (NIACL) Earnings Call Transcript & Summary

Welcome to the conference call of the New India Assurance Company Limited, arranged by Concept Investor Relations to discuss its Q4 FY '25 results. We have with us today Mrs. Girija Subramanian, Chairman-cum-Managing Director; Mrs. Kasturi Sengupta, Executive Director; Shri. Vimal Kumar Jain, Chief Financial Officer, among other esteemed management members. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mrs. Girija Subramanian, Chairman-cum-Managing Director. Thank you, and over to you, ma'am.

Good evening, everyone. I'm Girija Subramanian, Chairman-cum-Managing Director of The New India Assurance Company Limited. It's my privilege to welcome you to this investor call following the announcement of our performance review for the fourth quarter of FY '25. Joining me today are Mrs. Kasturi Sengupta,Executive Director; Shri. Vimal Kumar Jain, Chief Financial Officer; Mr. K.V. Raman, General Manager, Finance; Mr. Sharad, our Appointed Actuary; and many other General Managers. At this outset, I would like to extend my heartfelt gratitude to all the participants for taking the time to join us this evening. I also wish to thank our shareholders, investors and analysts for your continued trust in our organization. Your unwavering support continues to be a key driver to our success, motivating us to deliver consistent and sustainable growth. I would quickly give a brief background of our company and then proceed to the financial and operational aspects for the fiscal year 2025, post which we shall proceed to the question-and-answer session. Me and my team shall do our best to answer all your queries and clarify all your doubts. As you know, we are a 106-year-old insurance company conceptualized by Sir Dorabji Tata in 1919 and Nationalized in the year 1973. We are a PSU under the Ministry of Finance, Government of India. We have a Pan-India presence with 1,660-plus offices in 25 countries. with so many geopolitical risks and rising uncertainties hovering around. Insurance both life and non-life have become the need of the hour. And we firmly believe your company, The New India Assurance Company Limited, is best placed to cater the growing needs of the non-life insurance. Also, the young generation has an awareness, willingness and discretionary income to opt for non-life insurance to safeguard themselves against any adversities. This has been largely possible with the awareness initiative of the IRDAI and the Government of India. Let me assure you that we have a robust cybersecurity infrastructure in place, which is evident in the fact that we have been certified ISO 27001:2022 for IT security, which ensures our emphasis on customer data protection and technological capability. The general insurance industry stands at INR 33,649.27 crores as of April '25, which grew at a rate of 13.38% year-on-year. As per General Insurance Council's data, of which your company has underwritten INR 6,026.63 crores, which is an 18% of the total gross direct premium underwritten, which grew by [Tech Difficulty] year-on-year. Business highlights. The distribution mix stands at a direct 28.55% from the direct sources; agency, 28.56%; bancassurance 0.64%; dealer, 8.73%; brokers, 33.52%. Product mix stands as follows: Health & PA, 46%; Motor TP, 15%; Motor OD, 13%; Marine, 2%; Fire, 14%; Crop 1%; Others, 9%. In quarter 1 FY '26, 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 of aaa.IN Exceptional and has confirmed the financial strength rating of B++ Good and long-term issuer credit rating of bbb+ Good to New India Assurance Company Limited. The outlook of these credit ratings is stable. Your company has invested in equity shares of the Bima Sugam India Federation, a Section 8 company through private placement for a cash consideration amounting to INR 5 crores. Bima Sugam will act as a one-stop solution e-platform for people to access all products of all insurance companies. It will be a digital platform to be regulated by the IRDAI, where the customers can buy insurance policies and get their claims settled and will also be useful for all the stakeholders like insurers, agents, depositories, et cetera. At New India Assurance Company Limited, we have always endeavored to preserve an equilibrium between growth and profitability without which an organization cannot survive. We constantly strive to make sure that every underwritten policy is risk-weighted and contributes to enhance shareholder value. In line with this, we have consciously foregone corporate accounts, which were not revenue accretive. However, this has been compensated with quality underwritten policies, which have minimal risk. All of the above conscious efforts are evident in our financials for FY '24-'25, which are as follows: financial performance summary for '25 -- FY '25. The gross direct premium income Indian business stood at INR 38,660 crores in FY '25 as compared to INR 36,997 crores in FY '24. The gross written premium global stands at INR 43,618 crores in FY '25 as compared to INR 41,996 crores in FY '24. Net premiums earned global reported at INR 35,368 crores in FY '25 as compared to INR 34,028 crores in FY '24. Net worth stands at INR 21,538 crores in FY '25 as compared to INR 20,827 crores in FY '24. Net profit after tax stands at INR 988 crores in FY '25 as compared to INR 1,129 crores in FY '24. Now coming to the important ratios for FY '25, which are as follows: net incurred claim ratio is at 9.61%, commission ratio 9.95% of net written premium compared to 8.74% in FY '24. Expense ratio 10.21% of net written premium compared to 13.78% in FY '24. Combined ratio, 116.78% compared to 119.88% in FY '24. Solvency ratio 1.91 compared to 1.81 in FY '24. The return on equity ratio is at 4.66%. Digital and IT transformation. Our digital initiatives have started yielding significant results. A growing number of customers are now opting for digital channels to purchase policies and settle claims. A substantial volumes of claims have been processed digitally, and this segment is expected to continue its upward momentum. Several transformative IT initiatives have been executed. These include a complete revamp of our website with an enhanced UI/UX and the introduction of an NLP-enabled chatbot in 8 languages. We have also launched WhatsApp services offering features such as policy download, claim status tracking, product information and live chat again, available in 8 languages. Our 24/7 multilingual call center now supports end-to-end services related to product queries, policy issuance and claims. Our customer portal enables a seamless digital journey for buying standard insurance products and managing policies and claims online. We have implemented AI-based claim automation for motor own damage claims up to INR 1 lakh and introduced HSN code-based digital survey mechanisms to facilitate real-time claim processing. Advanced analytics tools like Oracle Analytics are being used for actuarial pricing. Additionally, an AI-powered fraud-based and abuse tool is deployed for fraud detection in specialized health operations. We have aligned ourselves with several national initiatives. Our integration with the account aggregator ecosystem is live. We are also integrated with the Jan Suraksha portal. [Technical Difficulty]

Ladies and gentlemen, the line for the management has been disconnected. Kindly stay connected while we try to reconnect them. Ladies and gentlemen, thank you for patiently holding. The line for the management has been reconnected. Thank you, and over to you, ma'am.

Yes. We have realigned ourselves with several national initiatives. Our integration with the account aggregator ecosystem is live. We are also integrated with the Jan JanSuraksha portal for PMSBY, now connected with 7 partner banks. Furthermore, claims are being processed through the NHCA platform across multiple hospitals. On the developmental front, we are progressing towards onboarding with the open network for Digital Commerce ONDC in the health line of business and implementation of IFRS 17 and Ind AS 117 is already underway. We are also collaborating with fintechs and start-ups for process enhancement, implementing IT service management and AI-based knowledge systems and expanding our digital marketing efforts through SEO and social media. With this, I come to the conclusion of my opening remarks and invite our General Manager of Finance, Mr. K. V. Raman to provide a detailed overview of our financial performance.

Yes. Good evening, everybody. I am pleased to present the financial performance of this company. For the year ending 31/3/25, the gross written premium of the company is INR 43,618 crores as against INR 41,996 crores of the previous year and this gives an year-on-year change of 4%, 3.86% for the current year, which is in alignment with the reduced market growth of the industry and the net written premium after the reinsurance arrangement after the premium has ceded out, the net written premium is INR 36,315 crores as against INR 34,407 crores, which works out to roughly 83% of the gross written premium and the net earned premium as calculated as per the providing regulation, it is INR 35,368 crores as against INR 34,028 crores of the previous year, which works out to around 82% of the gross written premium. And the net incurred claim stands at INR 34,168 crore as against INR 33,128 but in terms of percentage of ICR, on the net earned premium, it worked out to 96.61%, which is less compared to 97.36% of the previous year. And the commission outgo works out to INR 3,615 crores as against INR 3,008 crores and the increase is due to the reward and remuneration given to intermediaries where the incurred claim ratio is better this year. And on operating expenses, it is INR 3,709 crores as against INR 4,742 crores, making a significant reduction. And in terms of percentage, it is 10.21% for the year '24, '25 compared to 13.78% of the previous year, making significant improvement. So the combined ratio works out to 116.78% for the recent year as against 119.88% of the previous year, making a difference of improvement of 3.1%. The underwriting results are the loss INR 61,124 crores(SIC) INR [6,124] crores, which gives an improvement of 11% as against the previous year loss of INR 6,850 crores. and the investment income works out to INR 8,034 crores for the year ending 31/03/25 compared to INR 9,241 crores, which is basically due to the investment market behavior. And the split up of interest and dividend income is INR 5,214 crores as against INR 4,872 crores of previous year, where the company has done well in the interest and dividend income, and the capital gains are INR 2,820 crores as against INR 4,369 crore, which is due to [difference] in fair value change. So it is evident that the investment income is less due to the market behavior and the other income and expenses are INR 875 crores as against INR 946 crores of previous year, which mainly includes the provisions made during the current year towards nonmoving balances. And the profit before tax, it is INR 1,034 crores as against INR 1,445 crores, and the tax component is, as per the rules, it is INR 46 crores as against INR 316 crores of previous year. This is less because of the provision and advanced tax already paid. And the profit after tax is INR 988 crores as against INR 1,129 crores of previous year. We have also uploaded the figures of the latest quarter, the comparative figures of latest quarter and the previous year last quarter. And the income -- other income includes the, as I already mentioned, it includes the legacy nonmoving balance provision, which has been made as per the board-approved policy. There is also a comparative chart of combined ratio. Gross written premium and investment income and profit after tax of the latest quarter compared to previous year quarter and the '24, '25 year compared to previous year, which has been uploaded also in our website. And the solvency ratio of the company as on 31/03/25 stands at a sound 1.91% compared to 1.81% of previous year. and the net worth stands at INR 21,538 crores compared to INR 20,827 crore, which shows an improvement. And the fair value change account stands at INR 21,406 crores compared to INR 23,569 crores, which is due to the loss in capital gains only. And the technical reserve of the company stands at INR 53,177 crores compared to INR 53,114 crores of the previous year. And the return on equity stands at 4.66% as against 5.58%, but ignoring the provisions made, it would be much better than 5.58%. Segment-wise performance. On fire department, the premium done INR 6,225 crores compared to INR 6,744 crores and the ICR is 71.2% compared to 80.1% of the previous year, which shows that the LOB is going in the right direction. And the marine premium, INR 1,010 crores as against INR 1,032 crores. Here, the ICR is very decent 53.7% compared to 48.1% of the previous year. And in Motor OD. It is INR 5,406 crores as against INR 5,152 crores with a growth of 5% -- 4.9% exactly. And the ICR stands at 104.2% compared to 105.8% of previous year. And in Water TP, it is INR 6,652 crores compared to INR 5,993 crores of previous year. And the year-on-year growth is 11% here and the ICR is 108.2% as against 96.4%, which is actually indicating that the department -- this particular portfolio is due for revision and premium, and we are awaiting instructions from the government and regulators. And Health & PA , it is INR 19,928 crore compared to INR 19,025 crores of previous year with a growth percentage of 4.7% which is in tune with the company's growth rate because our health portfolio is around 46% of the company. And the ICR has improved to 100.9% compared to 105.9% of the previous year, having a significant improvement of 5%. And the crop is INR 483 crores as against INR 313 crore of previous year. And the ICR is 81% as against 37.6% and for all other business put together, it is INR 3,914 crores compared to INR 3,737 crores of previous year with a grow rate of 4.7% which is also in line with the company's growth rate. And the ICR of all other business put together, it is 58.8% compared to 59.7% of previous year. Overall business already, as mentioned, it is INR 43,618 crore with a growth of 4%, with an ICR of 96.6% as against the previous year performance of 97.36% ICR. If we do an analysis of excluding Motor TP, which the premium rating and the claim settlements are not in our hands, if you remove, exclude TP and see the same figures, it works out to 94.2% of ICR compared to 97.6% of previous year, which shows that the company is going in the right direction of improvement of more than 3.1% growth -- improvement in ICR. And there are figures compared to the industry also. I'm pleased to confirm that the company continues to be the #1 company in general insurance market with a market share of 12.6% this year. And the industry is also growing at around 6%, whereas our company's growth is 4.5%. Here, if you compare the first half year of the company and second half year of the company, it is evident that the company's performance during the first half year was much lower than that of the industry growth, whereas in the second half year, after the senior management has changed, it is faster than -- it is more than the industry growth, which is 6.21%, leading to overall annual growth of 4.5%. Segment-wise, market share is given. Here also, New India is continuing to be #1 in many portfolios. In fire, it is 16.3% market share. In Marine, 17.3%. In Motor, it is 10.6%. And Health & PA it is 15.5%. All other line of business put together, it is 16.3%. Overall. Our volume is 12.6% of the industry. And if we exclude the crop, which is an inward business, it is 13.9% of the industry. So these are certain credentials about the company already mentioned by our CMD madam, we are in the 106th year of operations, and we are the market leader in -- with a strong brand image. And the national credit rating by CRISIL is at AAA and international credit agency, AM Best has given B++ and we are also operating -- we are not only an Indian insurer, we are also operating in 25 other countries since 1920. Our oldest to foreign operation is from 1920 in London, and we continue to operate in 25 countries in different business models like branches, agency, subsidiary associate companies, et cetera. And we are having multichannel distribution of network like broker, agency, online, web aggregator, direct, et cetera. And the number of offices as on 31/03/25, 1,668 offices operating in 3-tier structure of Head Office, Regional Office and Branch Offices. And the segment mix is already mentioned by madam. It is health comprises of 46%, and the Motor OD and TP put together is comprising 28%. And fire -- property business works out to 14%. And Marine 2%. And Crop 1%. And all other line of business put together it is 9%, totaling 100%. And so it is a very balanced portfolio, which is helping the company to perform consistently better with sustainability. And this is the distribution mix chart where it shows the direct business is around 28.55%, and the broker continues to be the #1 channel of 33.52% and the agency channel, which is also historically very -- one of the very strong distribution channel of the company, amounting to 28.56% of our business. And the dealer business is around 8.73%, and the Bancassurance is about 1%, where we have scope to improve in the coming years. And these are some of the key initiatives, some are already mentioned by CMD Madam, and we are launching a new product several new products, including parametric insurance, and this year has been declared by our company as MSME year to focus on retail business, which is more profitable in terms of ICR in all other -- in many line of business. So we have chosen this year to be an MSME year. And the emphasis on growth on profitable business is already there, and we have sufficient targets have been given to the regional offices already. And there is also an effort to increase our penetration in states assigned to us by the regulator and government by state insurance plan. And further, the company is also working on the risk management strategies by implementing ERM with the professional assistance of EY company also towards moving to higher credit rating to establish our credit rating in the international market also. These are certain IT initiatives already mentioned by CMD Madam, the call center offering services in multiple languages. Majorly spoken languages apart from Hindi and English. And the website is now revamped so that our customers and public are able to see the information about products, offices, et cetera, in a very clear way. And our WhatsApp services has also started in multiple regional languages, 8 languages for policy issuance and claim-related basic services. And we have AI, artificial intelligence and machine language enabled chatbot also for customer service, which is available. And the claim automation efforts are continuously on and we have already automated Motor OD claims up to INR 1 lakh and marine cargo claims up to INR 50,000 and customer portal is also offering seamless user experience for certain routine products, which can be accepted by the company without any manual intervention. Thank you all.

[Operator Instructions] The first question is from the line of Mahek from Emkay Global.

A couple of questions. So first is on the motor business. Sir, I just wanted to understand how are you looking at the motor business for the coming year FY '26? And what would be your strategy in terms of the Motor TP business if the price hike doesn't come in FY '26. So that would be my first question.

So can I answer now? Or will you put up the second question also?

Yes, ma'am, the 2 questions I'll ask later on.

Okay. So for motor business in the coming year, we will continue our strategy for the last year, which has reduced results for us. We are targeting the OEM segment where OD is concerned, we are trying to see that we write more private car business and change our mix in favor of private car vis-a-vis commercial vehicles. And this will be the strategy going forward also. And because we find that ICRs are better in this segment. And as far as TP is concerned, I mean, it is a mandated business, so we have no control over TP business. We will have to continue to do TP business. Even -- I mean, we simply cannot have a strategy around it. The only thing we can do to reduce overall impact is to keep aligning our OD strategy in a way that the entire OD plus TP becomes sustainable. But as I have said before also, that the TP premium hike is surely the need of the hour. And if that is there, then it will become a survival issue for most companies if it is not relooked into.

So ma'am my question for the motor TP strategy was more of from the perspective of the mix between the TVs and the CV business?

So in motor TP, we have better -- we have better loss ratios even for the CV business. So we will have a different strategy for motor TP when it comes to -- because we simply -- I mean, we hope we can target certain segments, wherever some -- the ratios are better for our book. We'll continue to target those segments, but we will see that overall, whenever there is a business that approaches us for TP, I mean, we simply can't refuse to do that. This is something that is mandated and therefore, whilst we do write whatever comes to us, we will surely look out for certain portfolios where the TP loss ratios have been favorable to us in the past.

Got it, ma'am. And secondly, just wanted to understand what led to the decline in the operating expenses to INR 571 crores during Q4. That would be the first one. And secondly, if I was going through the notes to accounts, so can you just explain me what would be the change in the expense allocation policy, which resulted in impact of around INR 650 crores for the quarter?

Yes, [Raman]?

Yes. Actually, the regulator has given an [UAM] policy, which gives us a cap on expenses of management, where the company is always having expenses of management well within the limit given by the regulator. But mainly the 2 reasons for the decrease in expenses. One is the company is facing retirement of many people where we are trying to induct new offices, recruitment process are already on. So this will give an impact in the reduction in wages also. And the number of offices compared to previous years is now very less. So it will reduce the administrative expenses also in terms of running expenses and rent of building, et cetera. So these factors put together has given a reduction in expenses of management.

Got it, sir. And what would be the explanation for the change in the policy?

No, no. It is not the policy by the company. It is the regulator has given a year ago from 2024 expenses of...

There is no change in...

There is no change in company view.

We are supposed to capital it at 30, it doesn't affect New India. In any way, we are very well within that already.

The next question is from the line of Akshay Kothari from Envision Capital.

Ma'am, can you just outline what is the debt versus equity mix of the investment book?

This is to -- our GM, Mrs. Chandra Iyer is with me.

Yes. Our debt portfolio is around 70% to 72% of our portfolio and equity is another somewhere between 15% and 15% is equity portfolio.

And the rest is money market?

Yes, right.

Okay. Ma'am, I wanted to understand what -- will this combined ratio actually come down? And how do we plan to take it down? Because actually, it's 16% cost of capital to raise INR 43,000 crores, we are paying 16% more. So what is the strategy for that?

Yes. So combined ratio for the industry average is at around 113% in non-life -- it is -- I mean, segment it is -- this is the way the industry works and the investment income and underwriting results, they together, they create the value for the entire operation. Now combined ratio has definitely come down from 120 to 117, which is a huge reduction for any insurance company of this size to achieve. So I mean we are putting in all strategies in place to ensure the combined ratio keeps coming down year-on-year. And I'm sure that with all the efforts that we are putting in terms of claims management, in terms of selection of the right risk in terms of speed in settlement of claims, all of this will surely result in better combined ratios as we go.

Okay. This 113% you mentioned was of the Indian market, right?

Yes.

And what is the mix for the foreign operations currently? How much do we...

Foreign operation is around 9% of our entire book.

Okay. Because internationally, I think combined ratios are much lower.

Internationally, combined ratios are within 100, they will not be very lower, but yes, they are -- yes, the investment income doesn't exist over there.

Yes.

There is no investment income. So it is -- I mean, therefore, the growth also will be very, very small. They don't become large, very fast. There are a lot of restrictions because of the investment climate in those countries.

[Operator Instructions] The next question is from the line of Karan Negi an individual investor.

Am I audible?

Yes, sir.

My first question is, as you mentioned the combined ratio has improved to 116.78% in FY '25 and the underwriting losses reducing by 11%. So what are the specific measures are driving for this improvement? And what is the time line and road map for bringing the combined ratio below 100%?

Yes. So Karan, thanks for the question. So the combined ratio, there are a lot of initiatives that we take because we are in the insurance business, and we would definitely like to see the combined ratio reaching below 100%. And in this entire initiative, we also need to remember that our company is around 106 years old. And we carry a legacy of so many years that comes down the line. Apart from that, we -- there's a lot of initiatives that we have taken in the last 2, 3 years is to -- is basically on risk selection whether it is group or individual risk, whether it is retail business, we have seen to it that we try and see that there is some value for this company at the end of the day when we write the business at a particular price. And now in line with this philosophy that we need to have profitable growth, we have even shed so many group accounts on Mediclaim which did not suit -- the pricing did not suit us and definitely, we would have made more losses, had we continue to write. So more than 900 such accounts we have left in the last year, simply to see that we are more profitable on the business that we do. And therefore, I think a lot of this risk selection, whether it is medical -- Mediclaim business, whether it is health, I mean home, motor in all classes, we have tried to see that there is profitability at the end of the day, right, from our underwriting itself and not waiting for investment to step in. But having said that, we are in the business of uncertainties. And therefore, since we ensure uncertainties, there are many events that sometimes surprise us, which cause losses, and therefore, the results are not always bang as expected. But definitely with so many initiatives happening, whether it is intervention of automation, introduction of fraud and audit mechanisms, whether it is putting in SOPs in place, making our employees more accountable seeing to it that the audit, our TPAs and all external agencies put in a time line for every activity, all of these activities across all lines of businesses, they still result in a -- in this kind of an impact that we are seeing this year. It's a huge impact, 3.1% on combined ratio is huge, and we're very happy to have been able to do that. 11% reduction in underwriting losses is significant from this angle, and we hope to bring down the combined ratio significantly year-on-year. For near future, we would target 110 as our combined ratio, which is where we would feel it is possible and achievable. Below 100 is definitely a dream for all of us, and I hope and pray that your company is able to achieve that in the shortest possible time.

Okay, ma'am. And my another question is despite slower premium growth profitability improved. So do you expect any positive underwriting profit soon like over the coming quarters?

Underwriting profit on -- we are making underwriting profit on certain segments, but overall, when you see that is when it goes above 100. So, yes, we are putting in strategies in place across all lines of business. And each line of business is being focused as a separate profit center, profit vertical. We're trying to see that we generally profit out of each of them. And then let us see -- hope that next year brings in that number, yes.

Okay, ma'am. And the last question is what is the effective ROE for like FY '25 after reinsurance? And any target for FY '26?

Yes. sir, actually, will answer this.

Yes. The ROE based on reported number is around 4.46%. But if you remove the impact of the provisions that we have made towards the legacy balances, it is in excess of 8%.

The next question is from the line of Shobhit Sharma from HDFC Securities Limited.

Am I audible?

Yes.

So my first question is on your expenses. Employee expenses for the quarter is almost 1/3 of what it has been. So can you help us understand what has been the trajectory? I understand that you mentioned there have been retirement of employees. So can you help us understand the head count reduction which has happened? And how should we think about the trajectory going forward? Secondly, coming to the provision which we have made -- created on the reinsurance side. So can you help us understand what kind of receivables it was on the reinsurance side? Was it something related to claims or it was a commission? Probably, then I will ask my other questions.

On the expense reduction, part of it has been definitely driven by the... [Technical Difficulty]

Ladies and gentlemen, sorry for the inconvenience. The management line has been disconnected again. Kindly stay connected while I reconnect. The line for the management has been reconnected. Over to you, sir.

Do you want to take it?

Yes. I was actually going to answer this question, Shobhit.

First of all, I'd request you to look at the expense number on a full year basis and not just a quarter-to-quarter basis because like we mentioned earlier, there has been benefits of a lot of retirements which have happened. Net additions have been negative. And the new employees have come at a much lower cost than the senior people who have retired. So all those things have contributed to the lesser amount of expenses on the employee front. Apart from that, we also do the annual valuation of the pension liabilities. We do it once in the September, once in March. So whatever is the impact of that, which comes, we take that in the fourth quarter. So this time around, the impact on the fourth quarter was lesser than what it was in the same quarter last year. So this was the major 2 factors. So I would request you to look at it on a year-to-year basis. But whatever reduction which you see over there, that is kind of a tangible number you can work with.

As regards to the second question, what was the other provisions made for legacy issues. Then yes, they were a lot of reinsurance transactions. This is 106-year old company with a lot of transactions spanning across several years. And there were these many reinsurance provisionings, which were done at certain points of time. There were 2 times system changes that have happened during this period because of which there were a lot of these unreconciled balances. So we have viewed as per the guidelines for provisioning, Board approved guidelines. These provisions have been made, and we'll be giving them a thorough review and taking a call on these provisions in the near future.

Okay. Just on the employee expenses, a small follow-up on that. How should we see employee cost going forward? Should we see as rational 10% to 12% increase in that? Or should we see a similar run rate as this quarter?

No employee costs will be depending, it will be a function of the number of retirements and the number of induction. Now the -- and also the wage revision that is on annual will play a part in this. So it's a function of many parameters. And we are also going to recruit people because we are having around 4,000 people retiring in the next 3 to 4 years, and we need to plan and start deducting people. And therefore, that's already on. So it depends on the net differential between their salaries after taking into account the effect of the wage revision. So definitely, there will be -- it will be a different trajectory, and as we move every quarter, we'll keep reporting back to you.

And my question -- another question is on your health line of business. So you have improved your loss ratio considerably on those lines. So can you help us understand what is the mix of that the loss ratio in the retail and group business? And can you help us understand incidence rate, what you are observing on the retail lines of business? And how much is the inflation on those lines?

Yes. Our GM, Mrs. Sushama Anupam is present here, and she will explain the health side of it.

Yes. So Shobhit, actually in the health line of business, our portfolio, as you would have already seen that the group segment is larger as compared to the retail part of the business. Definitely, there has been an overall improvement but we find a good improvement in the retail segment, as always. Definitely, the medical inflation, which has been there, it has come down slightly, maybe from 14% to 12% but nevertheless, the incidence rate is as in the past meeting also, I had mentioned that the incidence rate we find is going up, and that has not settled as far as the pre-COVID days. So that continues to be as it has been in the past also. And our -- actually to share the exact numbers would be a bit difficult to say in terms of exact percentages, but I can tell you that the improvement in the retail segment has been almost 10 points compared to the previous year's position. And as far as the group segment is concerned, I would say that it has improved by about 3 to 4 points compared to the previous year's performance. Government definitely has seen improvement there also. So overall, if you see a combined effect we have seen a good improvement. And we feel that this will continue because it is a result of multiple factors. We have been increasing our audits. So last year, as we mentioned it, we had hired medical officers. So with the total strength of the medical officers, we could increase our audits that we conduct. Almost 34% audits were conducted last year. This year also, we have a region to increase it beyond 50%. So all other measures like we are participating with the GI Council initiative for cashless everywhere in Common Empanelment. So that all will also help in bringing down our ICR further. And we are trying that the cashless percentage goes up for us as it is going up for the industry. And of course, last but the most important factor is about, as our CMD madam has mentioned about the quality of the risk and the pricing aspect. So all these factors together have contributed to this improvement, which -- and like the changes that are coming out. So I feel that the tempo will continue in the coming times also.

Just a small follow-up on the elaborate response. Ma'am On the retail side, the loss ratio has improved significantly by 10 percentage points. So was it because of the price hikes which we have undertaken or it was primarily attributable to the audits, which we have done during the year?

Yes. So actually, very rightly, you are asking this question. It's a combination of both because see, we had come up with the price increase after almost 6 years and then a follow-up small change in the pricing strategy for the, zone-wise pricing and all. So that is one part of it. And the other part is the claims control. So it's a combination of both the things.

And are we planning any price hikes, say, going forward?

So actually, last time, we had shared with all of you all that what we have tried is to have age-wise pricing as against the previous pattern, which we used to have of slabs, age slabs. So now with that already in place immediately are we -- after seeing more -- some performance levels, when we may look at revising the prices. But for now immediately, it is not on time.

Okay. Ma'am, my another question is on your property lines of business. Last year, June onwards, we have seen [FLEXA] rates declining significantly. So can you help us understand how has been the experience up till now or the rates have been holding up? What kind of growth should we expect in the industry from June onwards?

Yes. So from last year, from May, almost May till end of December, there was a watershed in the property market. Prices just tanked. And I think there was mayhem. And I think we then had the industry sort of understood that this is not going to pull on because this property is mainly driven by reinsurance. And reinsurers are never comfortable with this kind of reduction in rates almost next to nothing, it was the rate. So therefore, I think the rates have corrected. After that, and they held on very well for the last 4 months, the fifth month rates are holding on. And we believe that this will continue into the future also. And once this continues, I think property as a class of business would be a little bit more comfortable.

Okay, ma'am. Another -- there was some circular from IRDAI on the cross-border reinsurance arrangement. So can you help us understand how have we collaborated with the CBRs in terms of the arrangement? Whether we are withholding the premiums or it is or they have set up their office in the GIFT City?

Yes. So CBR do form a part of -- a big part of our programs also. So most of the CBRs, whom we interact with, they have agreed for a premium withheld option, and that has been going very smooth. In fact, we did not experience any resistance or any great challenges during this renewal.

Okay ma'am. And ma'am last question is on a broader line. How do you see industry growth going forward as we want to control our loss ratio also, so what do you think would be the major revenues from where we can improve our loss ratios?

Yes. So industry growth is like it's been heavily driven nowadays by both the Prime Minister, by all the statutory authorities, you can say, even the regulator, everyone is driving the growth of the industry in terms of penetration. So obviously, if you penetrate well, the growth will also be there. And that is what we are working on. We are in line with the regulator's vision, we have also announced this as the year of the SME for New India. And we are working hard on ensuring that we enter into either to -- very in the remote corners of the country to ensure that we bring them also into financial inclusion. We have designed several products on the retail space to cover up for this segment of population that is uninsured. And we believe that this diversification that we have planned in terms of simple products, being sold into the interlines, customized to the needs of the population. This is what is going to help us diversify into the retail lines in a big way. And this will help us surely bring down the loss ratio of the entire book as a whole.

We'll take the next question from the line of Aditya Chopra, an individual investor.

Am I audible, ma'am?

Yes. Yes. You are.

Okay. My questions are somewhat long. So keep patience in hearing, right? Okay. Could you please elaborate on how Q4 has shaped up in terms of overall growth? Especially in the property insurance segment and what growth rate you have seen in this quarter?

Yes. One second. Basically, in Q4 -- so fire, we've had a reduction of 23% in fire for Q4. I mean -- that is because of a reduction in premium of -- from INR 6,744 crores for '23, '24. It has come down to INR 6,225 crores in '24, '25. So entirely for the last quarter, the reduction is around 7.7%. And for the year as a whole, it is around 23% reduction.

Okay. Okay. The second question being the INR 802 crores provision towards legacy reinsurance balances impacted the PAT and ROE. Can you clarify if this is the one time off? Is there potential for reversal or recoveries in future periods?

No, this is a onetime provisioning because it is -- actually, we have been working hard to get back our global credit rating. And some of the aspects that have come in the way of getting back our A- excellent rating from AM Best. One of the major issues has been this unreconciled reinsurance balances, which are legacy issues. And many other audit qualifications, and this has been a major part of it. So in an attempt to see that we cover up a lot of this ground and we are able to present a cleaner book of accounts and also then aspire for well-deserved A- Excellent rating from AM Best. We have done this -- we have seen to it that we provision for them and will be in the next couple of months, we will see how to treat these provisions and with that, I think, we'll be done with it. I don't think this is going to be ever repeated furthermore. There are a lot of systemic improvements that we have put around this. We have set up a certain task force. We have set up certain cells to monitor those areas because of which process -- because of process default because of which these unreconciled balances were there. So now -- as having plugged the gaps, I think this kind of scenario may not happen in the future. And we would be able to convincingly put this across even to our credit rating agencies.

Okay. Ma'am, my last question is what is the contribution of investment income versus underwriting income to total profitability in Q4? Especially, considering some recoveries in the equity market?

Can you say, Q4?

What is the contribution of investment income? What is the underwriting income?

So the -- for the last quarter '24, '25 Q4, the underwriting results is loss of INR 1,143 crores. And the interest and dividend income is INR 1,415 crores.

INR 2,339.

I'm saying the INR 2,339 breakup...

It is what the investment income, which is INR 2,339 underwriting is minus INR 1,143. That is what. Resulting in a profit after tax after tax of -- profit go up.

Profit before tax is INR 520 Cr.

So it is the profit after tax is that INR 347 crore.

INR 347 crore.

In the last quarter. Fourth quarter. So just to repeat.

Aditya, do you have any further questions?

No, that's it from my end.

Ladies and gentlemen, that was the last question for today. I will now like to hand the conference over to the management for closing comments. Thank you and over to you.

I would like to take this opportunity to thank all our investors, our business partners, our employees and everyone connected to New India Assurance Company, one way or the other. Mainly our customers who are constantly reposing trust, trust in this institution, which has stood strong for over 106 years. And we will be there strong leading from the front across many more years to come. And we would put every effort that is there to see that we keep this trailblazer on. The entire management team and the workforce to ensure that we deliver on the promises that we have given to our customers at all times. Should you have any queries, please feel free to e-mail us, and we shall be swift in responding back to you. Thank you so much for the time and attention that you have given to New India Assurance Company. And thank you for being with us in this journey.

Thank you, members of the management. Ladies and gentlemen, on behalf of The New India Assurance Company Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.