Oriental Insurance’s profit likely to fall 78 percentApril 16th, 2009 - 7:52 pm ICT by IANS
New Delhi, April 16 (IANS) Public sector insurance major Oriental Insurance Co Ltd (OICL) expects a steep fall of over 78 percent in profit for 2008-09, thanks to the economic slowdown.
The profits will be reduced “substantially” due to the slowdown in the economy, leading to defaults in premium payments and the company itself reducing the premium amount, OICL chairman-cum-managing director M. Ramadoss told reporters here Thursday.
“The current scenario has definitely taken a hit on our profits, we are looking at a profit before tax (PBT) to the tune of Rs.100-150 crore this fiscal” as against Rs.453 crore in 2007-08, he said.
The company has reported 4.5 percent growth in premium collections, with the gross collections moving up from Rs.3,800 crore in 2007-08 to Rs.3,960 crore in 2008-09.
Ramadoss said while the industry growth figure for premium was also expected to remain in the sub-10 percent bracket the company would be vying for a 7-8 percent growth in 2009-10
“This has been a very challenging year for the entire industry and we were compelled to reduce the premium rate despite it affecting our bottom-line,” he said.
Although the conditions are not likely to improve before 2010-11, “we are trying to increase our top-line with a largely untapped market at our disposal,” Ramadoss added.
According to him, health insurance was the biggest growth segment for the company last fiscal, recording over 35 percent growth.
Health comprises about 15 percent of OICL’s total insurance portfolio.
The company Thursday announced full implementation of core software networking across India for running centralised insurance services.
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