Niva Bupa Health Insurance Co. aims to reduce its combined ratio to a range of 95% to 96% within the next two to three years, the insurance provider's Managing Director and Chief Executive Officer Krishnan Ramachandran told NDTV Profit on Thursday.
In the October-December quarter, Niva Bupa's combined ratio stood at 96.3%, while for the nine months ending December 31, 2024, it was at 100.9%.
The combined ratio is an important key performance indicator (KPI) for insurance companies, which indicates their profitability and financial stability. A combined ratio below 100 shows that the company is making profits, while a 100-plus number indicates lower profitability.
“In FY24, we closed our combined ratio at 98.8%. And nine months FY25 our combined ratio stands at 100.9%. In terms of trajectory, on this accounting basis the steady state trajectory that we would like to get to is between 95-96% combined,” he said in an interview with NDTV Profit.
“So, that's the steady state. Maybe two to three years out is where we expect our combined ratios on these spaces to get to,” the top executive added.
Talking about overall growth, Ramachandran said that his company's performance is benchmarked relative to the industry growth.
“One of our strategic pillars is to build a granular, growth-oriented and profitable health insurance franchise. The way we measure and benchmark our performance is relative to the broader health insurance market,” he said.
The top executive mentioned that Niva Bupa Health Insurance aims to grow by 10 percentage points higher than the market average at a given point in time.
“We definitely want to grow 10 percentage points more than where the market is from a growth standpoint. So that gives you a sense of what you can expect from us from a growth trajectory standpoint,” he said.
Another key performance indicator (KPI) that Ramachandran highlighted is the company's retail market share and its target for growth in this area.
“The other KPI I would draw your attention to is what has been the movement in our retail market share? So nine months last year, our retail market share was 9%. That has improved to 9.6% in the nine months of this financial year,” he said.
Shares of Niva Bupa Health Insurance Co. were trading 0.6% lower as of 10:37 a.m., compared to 0.3% decline in Nifty 50.
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