HDFC Securities: High Claims Ratio Dents Q2 Profits Of New India Assurance
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HDFC Securities Report
Despite being India’s largest insurer, The New India Assurance Company Ltd. continues to make high underwriting losses.
We note that the company’s competitive positioning is weakening and remain concerned about its ability to write profitable business.
We estimate an FY22E adjusted return on equity of just 6.5% and can at best assign a valuation of just 0.7 times September-22E accredited in business valuation (less 10% discount for an additional 10.4% supply).
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