ABC Insurance – Finance Command Center

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CFO-ready summary · Q4 FY2025-26

• GWP ▲14.2% YoY to ₹4,820Cr led by Health (▲22%) and Motor (▲11%). New bancassurance tie-up contributing ₹320Cr in Q4.92%

• Combined Ratio at 103.2% exceeds technical break-even. Large health claims in Q4 drove loss ratio up 1.9 pts. Underwriting profit at risk.89%

• Investment income ▲9.3% to ₹682Cr — AUM grew to ₹9,240Cr. Equity portfolio delivering 14.2% return. G-Sec yields holding at 7.1%.94%

⚠ Solvency at 198% remains comfortable (min: 150%) but watch Q1 FY27 capital needs if GWP growth sustains at 14%+.85%

• PAT ₹310Cr (▼6.2% YoY) due to higher claims and IBNR provisioning. Excluding one-off ₹28Cr provision, PAT growth is broadly flat.87%

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Key metrics for CFO / Board presentation

Gross Written Premium₹4,820 Cr ▲14.2%

Net Earned Premium₹3,640 Cr ▲11.8%

Investment Income₹682 Cr ▲9.3%

Total Incurred Claims₹2,490 Cr ▲16.8%

Management Expenses₹1,267 Cr ▲13.2%

Profit After Tax (PAT)₹310 Cr ▼6.2%

Return on Equity13.4% ▼0.8 pts

Solvency Ratio198% ▲3 pts

💰 Q4 FY26 — Profit & Loss Statement (₹ Crores)

GWP → Underwriting Result → Investment Income → PAT

Line Item	Q4 FY26	Q4 FY25	YoY Chg	Variance	FY26 Full Year
■ PREMIUM INCOME
Gross Written Premium (GWP)	₹4,820	₹4,220	+₹600	▲14.2%	₹17,840
Reinsurance Ceded	(₹1,180)	(₹1,020)	(₹160)	▲15.7%	(₹4,380)
Net Written Premium	₹3,640	₹3,200	+₹440	▲13.8%	₹13,460
Change in Unearned Premium	(₹82)	(₹74)	(₹8)	—	(₹310)
Net Earned Premium (NEP)	₹3,558	₹3,126	+₹432	▲13.8%	₹13,150
■ CLAIMS & EXPENSES
Net Incurred Claims	₹2,434	₹2,072	+₹362	▲17.5%	₹8,940
Commission (Net)	₹284	₹248	+₹36	▲14.5%	₹1,060
Management Expenses	₹983	₹869	+₹114	▲13.1%	₹3,640
Underwriting Result	(₹143)	(₹63)	—	Deteriorated	(₹490)
■ INVESTMENT & OTHER INCOME
Investment Income	₹682	₹624	+₹58	▲9.3%	₹2,580
Other Income	₹38	₹32	+₹6	▲18.8%	₹140
Profit Before Tax	₹577	₹593	(₹16)	▼2.7%	₹2,230
Tax Expense	₹267	₹263	+₹4	—	₹1,040
■ BOTTOM LINE
Profit After Tax (PAT)	₹310	₹330	(₹20)	▼6.1%	₹1,190

⚠️ Combined Ratio at 103.2% — exceeds 100% break-even. Profitability depends on investment income. Immediate focus on loss ratio reduction required.

📈 GWP Growth Trend (₹Cr)

📉 Combined Ratio Trend (%)

🥧 GWP by Segment — Q4 FY26

💰 PAT vs Investment Income (₹Cr)

🏦 Solvency & Capital Adequacy

Solvency Ratio

198%

Min required: 150%

Available Solvency Margin

₹2,140Cr

▲₹180Cr YoY

Required Solvency Margin

₹1,080Cr

▲₹95Cr (growth)

Surplus Capital

₹1,060Cr

Comfortable headroom

📊 Key Ratios vs Industry Benchmark

Loss Ratio

68.4%

Industry avg: 65.8% | Target: ≤66%

Expense Ratio

34.8%

Industry avg: 33.2% | Target: ≤32%

Combined Ratio

103.2%

Industry avg: 99.0% | Target: ≤100%

Investment Yield

7.38%

Industry avg: 7.10% | Target: ≥7.0%

Return on Equity

13.4%

Industry avg: 14.2% | Target: ≥15%

📅 Budget vs Actuals — FY 2025-26

Metric	Budget	Actuals	Variance (₹)	Variance (%)	Status
Gross Written Premium	₹4,600	₹4,820	+₹220	▲4.8%	✓ Ahead
Net Earned Premium	₹3,500	₹3,558	+₹58	▲1.7%	✓ Ahead
Investment Income	₹650	₹682	+₹32	▲4.9%	✓ Ahead
Net Incurred Claims	₹2,200	₹2,434	+₹234	▲10.6%	⚠ Over
Management Expenses	₹920	₹983	+₹63	▲6.8%	~ Watch
Profit After Tax	₹360	₹310	(₹50)	▼13.9%	⚠ Miss
Combined Ratio	100.5%	103.2%	+2.7 pts	Adverse	⚠ Miss
Solvency Ratio	185%	198%	+13 pts	Ahead	✓ Ahead

📋 Loss Ratio by Segment (%)

📊 Claims Development — Quarterly (₹Cr)

🩺 Segment-wise Underwriting Performance

Segment	GWP (₹Cr)	NEP (₹Cr)	Net Claims	Loss Ratio	Exp. Ratio	Combined	U/W Profit
🏥 Health Insurance	₹1,650	₹1,240	₹968	78.1%	28.4%	106.5%	(₹81)
🚗 Motor – Own Damage	₹980	₹748	₹509	68.1%	32.6%	100.7%	(₹5)
🚗 Motor – Third Party	₹620	₹480	₹326	67.9%	31.8%	99.7%	₹1
🏠 Property (Fire & Engg)	₹580	₹448	₹240	53.6%	36.2%	89.8%	₹46
⚓ Marine	₹280	₹218	₹131	60.1%	33.5%	93.6%	₹14
🌾 Crop / Agriculture	₹380	₹296	₹231	78.0%	38.2%	116.2%	(₹48)
💼 Liability & Other	₹330	₹266	₹134	50.4%	32.0%	82.4%	₹47
TOTAL	₹4,820	₹3,696	₹2,539	68.7%	33.6%	102.3%	(₹26)

⚠️ IBNR & Claims Reserve (₹Cr)

Reserving adequacy — Q4 FY26

Outstanding Claims

₹1,840

IBNR Reserve

₹620

Total Claims Reserve

₹2,460

Reserve to NEP Ratio

67.1%

Q4 FY26 saw additional IBNR provisioning of ₹28Cr in Health segment. Actuarial review due May 2026.

✅ Claims Settlement Performance

Settlement Ratio

94.8%

▲0.6 pts YoY

Avg TAT

18 days

▲2d YoY

Repudiation Rate

4.2%

▼0.3 pts

Fraud Savings

₹38Cr

▲₹12Cr

Health Claims Settled96.2%

Motor Claims Settled97.1%

Property Claims Settled88.4%

Crop Claims Settled82.6%

Total AUM

₹9,240Cr

▲16.1% YoY

Investment Yield

7.38%

▲18 bps YoY

Investment Income

₹682Cr

▲9.3% YoY

Unrealised Gains

₹248Cr

▲₹42Cr QoQ

🥧 Asset Allocation — AUM ₹9,240Cr

📈 Investment Income Trend (₹Cr)

📊 Asset Class Performance

Asset Class	AUM (₹Cr)	% of Total	Yield/Return	Income (₹Cr)	Duration	Rating
📜 Government Securities	₹3,240	35.1%	7.12%	₹230	6.4 yrs	Sovereign
🏦 Corporate Bonds (AAA)	₹1,850	20.0%	7.68%	₹142	4.2 yrs	AAA/AA+
📈 Equity (Sensex-linked)	₹1,480	16.0%	14.20%	₹178	N/A	Large/Mid Cap
🏛️ PSU Bonds	₹960	10.4%	7.45%	₹72	5.8 yrs	AAA (PSU)
💵 Bank Fixed Deposits	₹740	8.0%	7.20%	₹53	1.2 yrs	A1+
🏢 Infrastructure Bonds	₹480	5.2%	7.82%	₹38	8.6 yrs	AA/AA+
💱 Liquid / Money Market	₹490	5.3%	6.85%	₹34	0.1 yrs	A1+
TOTAL	₹9,240	100%	7.38%	₹747	4.9 yrs	—

⚠️ ALM & Duration Risk Analysis

Asset vs Liability Duration

Asset Duration4.9 yrs

Liability Duration5.4 yrs

⚠ Duration mismatch: 0.5 yrs — within acceptable range. Monitor as G-Sec yields shift.

Interest Rate Sensitivity

100 bps rate rise → P&L impact(₹42Cr)

Equity 10% drawdown → impact(₹148Cr)

Credit limit: max 20% below AA. Current exposure: 14.2% ✓

Combined Ratio Deterioration (+2.4 pts)

⚠ Risk

Q4 FY26 combined ratio rose to 103.2% from 100.8% in Q4 FY25. Concentrated in Health and Crop segments driven by elevated claims frequency.

Top Drivers

Health — large hospital cluster claims (3 states)+1.4 pts · 90%

Crop — rabi season deficit rainfall (Rajasthan/MP)+0.8 pts · 86%

Motor OD — spare parts inflation+0.4 pts · 82%

Property segment improvement (offsetting)−0.2 pts · 88%

Recommended Actions

Re-price Health group policies at May 2026 renewals (+8–12%)
Reduce crop portfolio exposure — exit 2 loss-making states
Implement capitation model for top 20 hospital networks

PAT Miss vs Budget (₹50Cr shortfall)

⚠ Miss

PAT came in at ₹310Cr vs budget of ₹360Cr. Higher claims (₹234Cr over budget) and IBNR strengthening (₹28Cr) more than offset premium outperformance.

Bridge Analysis

Premium revenue (favourable)+₹58Cr

Investment income (favourable)+₹32Cr

Net claims (adverse)−₹234Cr

Expenses (adverse)−₹63Cr

IBNR one-off provisioning−₹28Cr

Tax benefit+₹4Cr

Net PAT variance−₹50Cr

GWP Growth +14.2% — Ahead of Budget

✓ Good

GWP reached ₹4,820Cr, ₹220Cr ahead of budget. Health and the new bancassurance channel led growth. Renewal retention improved to 82.4% in retail.

Growth Drivers

Health Insurance (group & individual)+₹198Cr vs PY

Bancassurance new tie-up (Q3 launch)+₹142Cr

Motor — private car segment+₹98Cr

SME Property — new product launch+₹64Cr

Crop — reduced due to exit strategy−₹42Cr

Next Steps

Target 3 more bank tie-ups in Q1 FY27
Launch SME Cyber Insurance (pipeline: ₹80Cr)

Investment Portfolio AUM +16.1%

✓ Good

AUM grew to ₹9,240Cr supported by strong premium inflows. Yield improved 18 bps to 7.38%. Equity returned 14.2% in FY26.

Portfolio Highlights

G-Sec portfolio yield expansion+22 bps

Equity portfolio unrealised gains+₹42Cr

PSU bond reinvestment at better rates+₹18Cr income

Liquid fund allocation (cash drag)−8 bps on yield

Q1 FY27 Actions

Deploy ₹200Cr liquid funds into 5–7yr infra bonds
Rebalance equity allocation to 18%

🚨 High Priority

Re-price Health Group Policies at May 2026 Renewal

High

Health loss ratio at 78.1% is unsustainable. Actuarial team to recommend 8–12% rate increase for group health renewals. Target: reduce health loss ratio to ≤72% by Q2 FY27.

Chief Underwriter

📅 Apr 15, 2026Open

Strengthen IBNR Reserves — Health Segment Review

High

Additional ₹28Cr IBNR booked in Q4. Actuarial review to assess further strengthening needed in Q1 FY27 given claims patterns in Rajasthan, Maharashtra, Karnataka.

Chief Actuary

📅 Apr 30, 2026In Progress

📋 Medium Priority

Reduce Crop Insurance Portfolio Exposure

Medium

Crop segment combined ratio at 116.2%. Exit Rajasthan and MP state government schemes. Redirect capacity to Property and Liability segments. Expected GWP reduction: ₹120Cr.

Chief Underwriter

📅 Jun 30, 2026In Progress

Deploy ₹200Cr Liquid Funds to Infrastructure Bonds

Medium

₹490Cr in liquid/money market yielding 6.85%. Redeploy ₹200Cr into 5–7yr AAA infrastructure bonds at ~7.82%. Expected incremental income: ₹19.4Cr per annum.

Chief Investment Officer

📅 Apr 30, 2026Pending Approval

Deepen Bancassurance — 3 New Bank Tie-Ups

Medium

Current bancassurance contributed ₹320Cr in Q4. Target 3 additional mid-tier bank partnerships in Q1–Q2 FY27. Expected GWP: ₹200Cr incremental. Commission cost: 10–12%.

Channel Head

📅 Sep 30, 2026Pending

Capital Planning for FY27 Growth — Board Approval

Low

At 14% GWP growth, solvency headroom is ₹1,060Cr. Stress test for 18% growth requires ₹280Cr additional capital by Q3 FY27. Board to approve Rights Issue or Tier 2 issuance.

CFO

📅 Jul 31, 2026Planning

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