National Insurance Co widens FY20 loss to Rs 4,100 crore

BENGALURU:

National Insurance Co

saw its full-year 2020 loss widen to Rs 4,100 crore from Rs 1,696 crore the previous year after the public-sector insurer saw a massive uptick in claims and expenses. This is the third-year in a row the

PSU

has reported a loss due to high claims in motor, health and crop business.


In a footnote its financial statement, the company said it has deferred some of its

pension liability

to FY2021, resulting in it understating its losses by Rs 630 crore.

In its financial statement,

National Insurance

said that the net loss of Rs 4,100 crore has severely impacted its net worth and solvency. Current solvency ratio is at an alarming 2%. In the last two years, National Insurance's solvency ratio has regularly dipped below regulatory requirement of 150%.

The company also said its net losses were impacted by increased provisions for future claims and higher pension liabilities.

National Insurance's premium earned, however, rose 52% to Rs 27,874 crore. Among the increased provisions, National cited Rs 1,430 crore added towards meeting employees' pension liabilities and Rs 6,000 crore set aside in the last three years for claims arising from its motor business.

The Centre infused Rs 1,675 crore as additional capital in July 2020.

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