AM Best has revised its outlook on The New India Assurance Company Limited to positive following signs of an improving trend in the insurer’s enterprise risk management (ERM) framework.
The agency upgraded the outlooks to positive from stable while affirming New India’s Financial Strength Rating of B++ (Good) and Long-Term Issuer Credit Rating of “bbb+” (Good). It also maintained the India National Scale Rating of aaa.IN (Exceptional) with a stable outlook.
AM Best said the decision reflected “an improving trend in the company’s ERM fundamentals,” citing enhancements to systems, controls, and account reconciliation processes, as well as progress in addressing audit qualifications that have persisted for several years.
The agency expects New India to continue strengthening its ERM by improving internal controls and resolving outstanding audit matters over the near to medium term.
Operating results have remained positive, although the company reported lower net income in fiscal year 2025 due to reduced investment returns and a one-time provision related to long-outstanding reinsurance balances.
Despite this, underwriting results continue to improve. In October, the insurer continued its surge in health premiums to 20.7bn rupees (see chart), reflecting its focus on the growing segment.
The business’s investment income, including interest and dividend income and realised gains from the sale of equities, also continued to make a sizable contribution to earnings. In the first half of fiscal 2026, robust investment returns again supported profits even as underwriting results deteriorated.
New India’s investment portfolio carries moderate risk, with most assets placed in domestic government and corporate bonds that are highly rated on the local scale. However, its balance sheet remains exposed to volatility arising from domestic equity holdings.
The company’s balance sheet strength was assessed as very strong, underpinned by risk-adjusted capitalisation at the strongest level at fiscal year-end 2025, as measured by Best’s Capital Adequacy Ratio. Its reinsurance assets are also viewed as being of good credit quality.
New India continues to hold the largest market share among non-life insurers in India. Its portfolio is moderately diversified by line of business and distribution channel, though concentrated in health insurance. Overseas branches, agency offices, and subsidiaries provide additional geographic diversification, but competition in health and motor segments remains intense in its domestic market.
