Kathmandu. India’s state-owned non-life insurance companies have incurred significant losses even though they have increased their premium income.
FY 2025. In 2026, 4 state-owned non-life insurers incurred a combined loss of Rs 10,050 crore. In the previous year 2024. In 2025, their profit was Rs 798 crore. As a result, these companies will have to submit a plan to reduce their losses or close their loss-making insurance business.
According to the news published in The Economic Times, this plan will be developed with the approval of the Board of Directors. It will focus on increasing financial efficiency, using technology and improving governance. The government will evaluate the progress of the implementation of this plan.
According to government data. In 2026, the total direct premium collection of these four companies was Rs 1,02,568 crore. In the previous year, the number was Rs 95,252 crore.
According to the data, National Insurance of India posted a loss of Rs 2,534 crore, Oriental Insurance Rs 4,061 crore and United India Insurance Rs 4,839 crore. New India Insurance posted a net profit of Rs 1,384 crore.
However, in the current financial year 2026. New India Insurance also incurred a loss in the second quarter of 2027. The company has incurred a net loss of Rs 1,267 crore in the three months from July to September. It had a profit of Rs 63 crore in the same period last year.
One of the reasons for the company’s losses is the increase in insurance claim costs. The Supreme Court’s judgment on compensation for motor vehicle accidents has led to additional provisions of about Rs 715 crore. In addition, claims for significant property damage caused by floods have also increased the cost.
In the second quarter, the company’s total expense ratio (including claims and other related expenses) stood at 156.2 per cent. This means that for every IR 100 premium earned, approximately INR 156 was spent.
The capital position of the other three state-owned companies is also weak. At the end of March 2026, the solvency ratios of National, Oriental and United India were -1.11, 1.63 and 1.36, respectively.
The minimum ratio set by India’s insurance regulator IRDAI is 1.5. This ratio indicates whether the company has enough capital to meet insurance claims and other obligations. A negative ratio refers to a large capital loss.
These companies’ core insurance businesses have incurred losses because they have been unable to set premiums appropriately for additional claim costs and risks.
FY 2025. 26 These 4 companies have incurred a total loss of Rs 29,071 crore. This is an increase of 58.3 per cent over the previous year. However, their actual (final) losses are lower due to investments and other income.
On September 2, the Indian Finance Ministry reviewed the operations of these companies. At that time, instructions were given to give priority to profit-oriented businesses and reduce the claim cost. The ministry evaluated the operational progress of these companies every 3 months. – Agency
