New India Assurance (NIA), India's largest general insurance multinational, reported a 61% YoY jump in Q4 FY26 net profit to Rs 558 crore, and a 40% rise in full-year PAT to Rs 1,384 crore. On the surface, these are impressive numbers — but the underlying picture is more nuanced.
Profit Growth: Investment Income to the Rescue
The profit surge was driven entirely by investment income, which grew 38% to Rs 11,112 crore for FY26 (Q4: Rs 2,513 crore). The company monetised part of its investment portfolio to support wage-related expenses, generating substantial investment gains. Without this investment income cushion, the company would have reported a significant underwriting loss.
The underwriting loss widened to Rs 8,882 crore for FY26 from Rs 6,124 crore in FY25, reflecting the structural challenges in NIA's core insurance operations.
Combined Ratio: The Wage Revision Impact
The combined ratio — a key measure of underwriting profitability — worsened to 122.57% for FY26 from 116.78%. However, this includes the full impact of wage revision and family pension revisions amounting to Rs 3,525 crore during the year. Excluding this one-time impact, the adjusted combined ratio stood at 116.67% versus 115.34% in the previous year.
In Q4 alone, the combined ratio stood at 118.34% versus 111.46% a year ago. The family pension revision from 15% to 30% added Rs 597 crore to Q4 expenses.
Segment Performance
Gross Written Premium grew 8.2% to Rs 47,174 crore. Market share increased from 12.56% to 12.74%. The Health segment showed improved loss ratios. However, Motor Third Party faced pressure due to lack of premium revision, and the aviation segment also contributed to higher incurred claims.
Sources: Asia Insurance Post (May 11, 2026), AlphaStreet Earnings Call Transcript (May 14, 2026), TradeBrains (May 12, 2026)