AM Best Lifts New India Assurance Outlook To Positive

KUALA LUMPUR, Dec 12 (Bernama) -- AM Best has revised the outlooks to positive from stable and affirmed the financial strength rating (FSR) of B++ (Good) and the long-term issuer credit rating (Long-Term ICR) of “bbb+” (Good) of The New India Assurance Company Limited (New India).

Concurrently, the global credit rating agency in a statement said it has affirmed the India National Scale Rating (NSR) of aaa.IN (Exceptional) of New India with a stable outlook.

The rating actions reflect New India’s very strong balance sheet strength, adequate operating performance, favourable business profile and marginal enterprise risk management (ERM), with a neutral impact from its majority ownership by the Government of India.

The outlook revision follows an improving trend in New India’s ERM fundamentals. AM Best cited enhancements to the company’s risk management framework, stronger systems and controls, and progress in resolving longstanding audit qualifications.

AM Best expects New India to continue strengthening its ERM in the near to medium term through improved internal controls and account reconciliation to resolve outstanding audit matters.

The company’s balance sheet remains supported by risk-adjusted capitalisation at the strongest level in fiscal year 2025, based on Best’s Capital Adequacy Ratio. Its reinsurance assets are viewed as high quality, while its investment portfolio carries moderate risk.

Despite sizeable holdings in domestic equities that may introduce volatility, New India’s bond investments are largely in well-rated government and corporate bonds.

AM Best assesses New India’s operating performance as adequate, with a five-year average return on equity of 2.5 per cent (fiscal years 2021 to 2025). Fiscal year 2025 earnings declined due to lower investment returns and a one-off provision on old reinsurance balances, though underwriting performance improved.

However, robust investment income, including interest, dividends and realised equity gains, continues to provide a sizable contribution to overall earnings. Operating earnings remained positive in the first half of fiscal year 2026, driven by robust investment returns.

New India retains its position as India’s largest non-life insurer by gross premiums written. Its portfolio is moderately diversified, though concentrated in health insurance, while overseas branches and subsidiaries support its international footprint.

-- BERNAMA