New India Assurance 4Q26 Results: CoRs remained elevated; dowgrade to Neutral

Research evidence excerpt

New India Assurance 4Q26 Results: CoRs remained elevated; dowgrade to Neutral

loss ratio increased to 95.9% vs. JPMe of

90%, while additional wage provisions of Rs 6.29bn also impacted earnings.

High proportion of equity (36%) in the investment mix adds to the difficulties Key Changes (FYE Mar)

in predicting investment income for the company as equity profits are booked Prev Cur Δ

on realization of capital gains/ losses. Under Ind-AS, the MTM changes on the Combined ratio - 27E 114.9% 115.6% 0.7pp

portfolio will result in significant swings in reported earnings. In our view, the Combined ratio - 28E 113.8% 114.7% 0.9pp

ROE - 27E 9.9% 8.5% -1.4pp

key stock price driver will be improving underwriting performance over ROE - 28E 12.4% 11.6% -0.8pp

reported profits, and any strong MTM gains in the investment portfolio.

Solvency capital: As of Mar-26, the company’s solvency ratio remained Style Exposure

robust at 184% (vs. 191% Mar-25).

• Combined ratio. New India’s 4Q26 combined ratio of 118%, which came in

higher than our estimates (+5%p vs JPMe of 113%), resulted in underwriting

losses widening to Rs 18.4bn vs. 4Q25 at Rs 11.4bn. Motor and Fire

Underwriting: FY26 underwriting losses in the motor OD/ motor TP/ fire

segments each widened by 4.7%/5.7%/5.3%p YoY, contributing to the poor

underwriting results in the quarter. Health: For FY26, health and personal

accident segment delivered growth of 13% YoY. Health segment loss ratios

improved by 1.8%p YoY to 99.1%.

• Key Risks to our rating: Upside risks: Under Ind-AS, RoE may improve due

to 1) deferred acquisition costs (limited extent as company growth rate is lower

than sector), 2) discounting of reserves will result in lower loss ratios given

large motor book, 3) any sharp up move in equity markets may result in higher