Bajaj General combined ratio reaches 104.5% in Q2 FY2027

Bajaj General Insurance Ltd. reported a 104.5% combined ratio in Q2 FY2027, up from 102.3% a year earlier, as its underwriting loss widened to Rs 115 crore and natural catastrophe, or NATCAT, claims affected results. Gross written premium nevertheless grew 10.0% to Rs 7,056 crore, while profit after tax fell 18.8% to Rs 420 crore.

Why did Bajaj General's combined ratio rise to 104.5%?

Bajaj General's Q2 FY2027 combined ratio rose because claims and catastrophe-related losses outweighed the improvement shown after excluding NATCAT claims. The reported ratio increased 2.2 percentage points from 102.3% in Q2 FY2026 to 104.5%, while the ratio excluding NATCAT improved to 102.0% from 102.3%. On the same basis excluding NATCAT and the source's stated 1/n impact, the ratio was unchanged at 101.4%.

For H1 FY2027, the combined ratio was 104.7%, compared with 102.9% in H1 FY2026 and 102.8% for FY2026. The underwriting result was a loss of Rs 246 crore for the half year, against a Rs 208 crore loss a year earlier. The profit-before-tax bridge attributes Rs 176 crore of the year-on-year decline to a higher claim ratio and Rs 75 crore to NATCAT claims, partly offset by a Rs 214 crore reduction in the net expense ratio, which comprises net commission and operating expenses.

How did Bajaj General change its premium mix?

Bajaj General reduced the mix of crop insurance and government health while expanding selected retail and group-health lines in H1 FY2027. Crop insurance fell to 7% of business mix from 9% in H1 FY2026, while government health declined to 5% from 7%. In contrast, group health increased to 24% from 19%, retail motor rose to 30% from 29%, and retail health increased to 6% from 5%.

This shift coincided with faster growth outside crop and government health. Gross written premium, or GWP, excluding those two categories grew 15.5% to Rs 11,268 crore in H1 FY2027 from Rs 9,754 crore, ahead of total GWP growth of 10.6% to Rs 12,845 crore. In Q2 FY2027, excluded-category GWP grew 21.3% to Rs 5,636 crore, versus 10.0% total GWP growth to Rs 7,056 crore. Gross direct premium income, or GDPI, excluding crop and government health grew 16% for Bajaj General in H1, compared with industry growth of 13%.

Bajaj General's market share in GDPI excluding crop and government health increased to 6.8% in H1 FY2027 from 6.6% a year earlier. Its total GDPI market share was unchanged at 7.3% over the same comparison, despite its 11% total GDPI growth trailing the industry's 12%. Bajaj General recorded H1 GDPI of Rs 12,798 crore, compared with Rs 11,554 crore in H1 FY2026, while the industry total rose to Rs 176,119 crore from Rs 157,638 crore.

Which lines drove Bajaj General's claims performance in H1 FY2027?

Health and commercial lines recorded higher loss ratios in H1 FY2027, whereas motor improved on a total basis. The health, personal accident and travel portfolio's loss ratio rose to 93.8% from 86.4%, as total GDPI increased to Rs 4,639 crore from Rs 3,824 crore. Within that portfolio, group employer-employee and other health GDPI grew to Rs 3,026 crore from Rs 2,233 crore, while government schemes fell to Rs 685 crore from Rs 806 crore.

Commercial lines and other business had a 75.1% H1 FY2027 loss ratio, up from 60.7% a year earlier. Excluding NATCAT, the loss ratio was 64.9%, showing that catastrophe claims accounted for part of the increase. The Q2 comparison was more pronounced: the reported commercial loss ratio rose to 98.1% from 62.0%, while the Q2 ratio excluding NATCAT was 78.1%. Commercial-lines-and-others GDPI slipped to Rs 4,256 crore in H1 from Rs 4,327 crore, with fire GDPI decreasing to Rs 1,417 crore from Rs 1,743 crore.

Motor provided a contrasting claims outcome. Its total loss ratio improved to 61.8% in H1 FY2027 from 65.6% in H1 FY2026, even as motor GDPI grew to Rs 3,903 crore from Rs 3,404 crore. Motor third-party loss ratio declined to 50.7% from 59.0%, while own-damage loss ratio increased to 74.8% from 72.9%. Motor third-party GDPI rose to Rs 2,133 crore and own-damage GDPI reached Rs 1,769 crore in the half year.

What happened to Bajaj General's profit, capital and investments?

Bajaj General's H1 FY2027 profit after tax, or PAT, declined 23.7% to Rs 898 crore from Rs 1,177 crore, while profit before tax, or PBT, declined to Rs 1,199 crore from Rs 1,583 crore. The PBT bridge shows Rs 329 crore of lower realised gains and Rs 18 crore less interest and other income, in addition to the claim-ratio and NATCAT effects. Interest, other income and capital gains totalled Rs 1,444 crore in H1 FY2027, down from Rs 1,791 crore a year earlier.

Annualised return on average equity was 15.2% in H1 FY2027, compared with 18.7% in H1 FY2026, and the solvency ratio was 229% against the regulatory requirement of 150%. Net worth was Rs 10,731 crore at H1 FY2027, versus Rs 13,433 crore in H1 FY2026. The presentation attributes the fall in net worth and assets under management, or AUM, to a Rs 1,590 crore buyback and a Rs 1,925 crore dividend payout.

Cash and investments AUM increased 3.8% year on year to Rs 36,313 crore in H1 FY2027, while annualised realised investment return declined to 8.2% from 10.5%. Bonds represented 46% of AUM, government securities represented 33%, equities 17% and other instruments 4%. The presentation says 94.1% of the debt portfolio was in AAA or sovereign securities, and 88.0% of equity investments were in BSE 100 stocks.

Conclusion

Bajaj General's H1 FY2027 figures show a portfolio moving away from crop and government-health exposure and growing faster in premiums outside those categories, but with a higher reported combined ratio and lower profit. Motor claims improved and the expense ratio declined, yet health and commercial loss ratios increased, while NATCAT claims, lower realised gains and a higher claim ratio reduced PBT from Rs 1,583 crore to Rs 1,199 crore.

The next disclosed benchmark is management's estimate of annualised return on equity of about 16.2% for FY2027 at 200% solvency, compared with the reported 15.2% in H1 FY2027. Investors can also monitor whether the H1 FY2027 combined ratio of 104.7% moves closer to the 102.8% recorded for FY2026 as Bajaj General pursues growth in selected retail, group-health and smaller-city channels.