Go Digit General Insurance Reports Strong Revenue Growth and Profit Surge

Go Digit General Insurance
Preeti Bali / 7:28 am / June 14, 2024

Go Digit General Insurance, a publicly traded company, recently released its financial statements for the fiscal year ending March 2024 (FY24). The company experienced a robust 37.4% increase in revenue from operations (net premium) during this period. Revenue climbed to Rs 7,096 crore in FY24 compared to Rs 5,164 crore in FY23.

Go Digit offers a variety of insurance products to its customers, including motor, travel, property, and health coverage. The premiums earned from the sale of these policies represent the primary source of revenue for the company.

Investment Income and Other Income Contribute to Overall Growth

Beyond premium income, Go Digit generated additional income streams in FY24. Interest earned on investments and contributions from the shareholder fund towards excess EOM (Earned Over Money) combined to add Rs 1,347 crore to the company’s overall revenue. This additional income helped to push Go Digit’s total income to Rs 8,443 crore in FY24.

Managing Expenses: Balancing Claims and Growth Initiatives

For insurance companies, settling claims submitted by policyholders is a core expense. Go Digit reported that claims settled accounted for 62% of the company’s overall costs in FY24. As expected, these claims settlement costs also increased, rising 43.8% to Rs 4,990 crore in FY24 from Rs 3,471 crore in FY23.

Another notable increase in expenses was the significant surge in commission and brokerage costs. These costs jumped a substantial 13 times to Rs 1,888 crore in FY24. This rise can likely be attributed to Go Digit’s expansion efforts and the need to incentivize sales channels.

The company also incurred expenses related to employee benefits, advertising and business promotion, legal fees, business support services, and other overheads. These combined costs experienced a 36.1% increase to Rs 7,958 crore in FY24.

Profit Soars Despite Rising Costs

Despite the increase in expenses, Go Digit managed to achieve a significant jump in profits. The company’s profit surged fivefold to Rs 182 crore in FY24 compared to Rs 36 crore in FY23 (previously reported as Rs 338 crore, which was later revised due to a shift in accounting policies). This substantial increase in profit can be attributed to the significant rise in “other income” and a potential reduction in advertising and legal fees compared to the previous year.

On a unit level, Go Digit’s expense ratio (cost to earn a rupee of revenue) stands at Rs 1.12.

Market Performance and Future Outlook

As of June 13, 2024, Go Digit’s share price is listed at Rs 340.6. The company boasts a total market capitalization of Rs 31,239 crore. Go Digit’s strong revenue growth and improved profitability suggest a promising future for the company within the Indian insurance market.

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