For the first time in its 90 year history, New India Assurance posted losses of Rs 421 crore in 2010-11. The largest general insurance company has taken a severe blow from of about Rs 300 crore from international operations.
According to New India Assurance Chairman and Managing Director, M Ramadoss, the insurer has taken a big hit in their exposure to Tokyo Electric Power Company (Tepco), Australia, New Zealand and Bahrain.
Tepco runs the Fukushima nuclear power plant, which faced serious damages as a result of the Japanese tsunami on March 13. Along with Swiss RE, Munich Re and certain others, New India Assurance was also a co-insurer for the plant.
Besides these losses, the insurer has been hit by other natural catastrophes like the New Zealand earthquake and floods in Australia.
M Ramadoss, said that the losses were entirely on account of co-insurance arrangements.
The government has expressed concerns over these heavy losses. A senior government official told ET, “It is a matter of concern that a public sector firm is reeling under losses. Naturally, an explanation needs to be provided. We have already made the presentation to the board. We have a senior finance ministry official and head of a public sector bank on our board.”
