Informist, Tuesday, Apr. 15, 2025

By Aaryan Khanna

MUMBAI – ICICI Lombard General Insurance Co. Ltd.'s net profit for the quarter ended March slumped nearly a third sequentially to INR 5.10 billion due to a fall in investment income amid soft growth in premium income. The net profit was sharply below Street expectations. As per the average of estimates from five brokerage firms, the net profit was seen at INR 6.16 billion.

The company's March quarter net profit fell 29.7% on quarter and 1.9% on year. However, the company said that its March quarter figures could not be compared with data from prior years due to a change in accounting norms.

The Insurance Regulatory and Development Authority of India had announced a change in accounting norms mandating non-life insurers to report premiums on an annual basis for all policies underwritten after Oct. 1. While non-life insurers can underwrite long-term policies, annually, premiums for only one year will be recorded, the guidelines said.

The insurer's net income from investments slumped 25.6% on quarter to INR 6.25 billion, its worst sequential fall since the June 2017 quarter. The fall in investment income weighed on the bottomline at a time when some operating parameters beat brokerage estimates. The net premium earned rose 3.6% on quarter to INR 52.26 billion in Jan-Mar, with the average analyst estimate showing a sequential fall in premium income to INR 47.11 billion.

With the change in the two major heads nearly offsetting each other, the company's total income fell marginally on quarter to INR 58.51 billion. Net commissions income shrank 11.7% sequentially to INR 10.26 billion. On other hand, total expenses rose 4.6% on quarter to 54.35 billion. For FY25, the general insurer reported a net profit of INR 25.08 billion, up 30.7% on year, on a total income of INR 229.37 billion.

Its gross direct premium underwritten rose 2.3% on year to INR 62.11 billion in March. The gross direct written premium in 2024-25 (Apr-Mar) rose 8.3% to INR 268.33 billion, both above industry averages, ICICI Lombard said in a release. Excluding the impact of the new IRDAI regulation, gross direct premium income grew by 11.0% for the full year, the company said.

The solvency ratio was 2.69 times as of Mar. 31 compared with 2.36 times as of Dec. 31 and higher than the minimum regulatory requirement of 1.50 times. The incurred claim ratio for ICICI Lombard rose to 71.6% in the quarter ended March, from 65.8% reported a quarter ago. During Jan-Mar, the general insurer paid claims worth INR 35.10 billion, higher than INR 32.04 billion reported a quarter ago.

The combined ratio worsened by 20 basis points to 102.5% in Jan-Mar and by 50 bps to 102.8% in FY25, including the impact of the IRDAI guidelines. Combined ratio is a measure of an insurer's underwriting performance, with a ratio below 100% showing underwriting profit. Excluding catastrophe losses, the deterioration for the financial year was only 10 bps at 102.4%, according to the release.

The general insurance company's investment book stood at INR 535.08 billion on Mar. 31, compared with INR 489.07 billion a year ago. It sourced 37.6 million policies digitally and issued 99.9% of the policies electronically in FY25, the investor presentation said.

On Tuesday, shares of ICICI Lombard General Insurance ended at INR 1,822.60 on the National Stock Exchange, up 6.1%. The earnings were announced after market hours. End

Edited by Akul Nishant Akhoury

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