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Informist, Friday, Oct. 18, 2024

--ICICI Lombard: Comfortable with 65-70% operating motor insurance loss 
--ICICI Lombard: Pricing competition hurt growth of group insurance business

 

MUMBAI – ICICI Lombard General Insurance Co. Ltd. is comfortable with a loss ratio in the range of 65-70% in the motor insurance segment, Chief Financial Officer Gopal Balachandran said in a post-earnings call with analysts on Friday. In Jul-Sept, the general insurer's loss ratios in motor owned damage and motor third-party segments were 65.9% and 60.2%, respectively. The overall loss ratio for the quarter was 71.4%.

 

"The 60% combined loss ratio that we are showing on motor TP (third party) is a function of decline in accident... it is the structural decline in incidents, it is the benefit of Motor Vehicle Act that we are getting now," Balachandran said.

 

The company's operating profit for Jul-Sept was INR 6.64 billion, out of which motor segment accounted for INR 5.01 billion.

 

Sanjeev Mantri, managing director and chief executive officer of the company, said growth in the group insurance business moderated in the September quarter due to pricing pressure, and the health insurance business was impacted due to relatively muted disbursement by financial institutions.

 

The gross direct premium income of the company was in Jul-Sept INR 67.21 billion as against INR 60.86 billion in the corresponding quarter a year ago, a growth of 10.4%. This growth was sharply higher than the industry growth of 2.0%.

 

The health segment continued to deliver double-digit growth, largely driven by retail business, while group and corporate segment grew 8.4%.

Balachandran said the company plans to make sure that expenses of management, which includes both commission plus operating expenses, are well within the limit of 30% at an aggregate level. The ratio of management expenses stood at 29.8% in Jul-Sept, as against 28.6% a year ago and 26.8% in the previous quarter. The general insurer's net commission rose 14.6% on year to INR 8.4 billion during the quarter. Sequentially, net commission was up 5%.

 

ICICI Lombard reported a 20.2% on-year jump Jul-Sept net profit to INR 6.94 billion on the back of strong growth in net premium earned, coupled with robust income from investments. Sequentially, the bottom line was up 19.6%.

 

The board has recommended an interim dividend of INR 5.50 per share. Friday, shares of ICICI Lombard General Insurance ended at INR 2,020.95 on National Stock Exchange, down 1% from the previous close. The earnings were announced after market hours.  End

 

Reported by Richard Fargose and Christina Titus

Edited by Ashish Shirke

 

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