ICICI Lombard General Insurance Company conducted a conference call on 18 October 2024 to discuss its financial results for the quarter ended September 2024. Sanjeev Mantri, MD & CEO of the company addressed the call:

Highlights:

Gross domestic premium income (GDPI) of the company increased 10.4% as compared to the industry growth of 2.0%. Excluding crop and mass health, the company grew by 9.4% as compared to the industry growth of 6.9%.

The commercial lines segment grew at 1.2%, as against industry growth of 2.0%. The company continues to maintain leadership position in Engineering, Liability and Marine Cargo segments. 

In the fire segment, the company remained vigilant in terms of risk selection while maintaining market share.

Motor segment registered growth of 16.1% as against industry growth of 6.2%, aided by growth in the old business. The company continues to maintain market leadership with robust capabilities across distribution, underwriting, claims servicing and actuarial practices.

The company sustained a balanced portfolio with a mix of private car at 54.4%, two-wheeler 24.6% and CV 21.0%.

Preferred Partner network (PPN) enabled to service 72.8% of Non-OEM claims in Q2FY25, up from 63.4% in Q2FY24.

The Health segment grew at 12.3% in Q2FY25, led by Retail Health rising 41.4% in Q2FY25 as against industry growth of 17.7% supported by recently launched product - Elevate.

Market share for Retail Health segment has now reached 3.5% in Q2FY25.

In the Group Health- Employer Employee segment, the company took a cautious approach due to increased competitive intensity. Consequently, the company grew by 1.0% in Q2FY25 as compared to growth of 34.6% in Q1FY25.

During the quarter Banca business de-grew by 2.6% due to lower credit disbursement growth in key relationship partners. Within this, ICICI Group distribution grew by 19.6% for Q2FY25 due to continued strategic focus on branch banking business.

The company continues to strengthen digital business. During the quarter customer facing digital business grew by 14.7%, constituting 6.3% of overall GDPI.

Investments in new customer acquisition strategy through website led to growth in fresh business of Motor and Health segments by 45.9% in Q2FY25.

The company continues to strengthen multi-product, multi-distribution strategy, led by focus on product innovation, data analytics and digital enhancements.

Agents (including Point of sale or POS) count, was 1,33,683 end September 2024 from 1,31,021 end June 2024.

During the quarter, the industry witnessed multiple CAT events, namely floods in Andhra Pradesh, Telangana, North India, Gujarat etc. impacting combined ratio. Combined ratio was 104.5% in Q2FY25 as against 103.9% in Q2FY24. Excluding the impact of CAT losses of Rs 94 crore in Q2FY25 and Rs 48 crore in Q2FY24, the combined ratio was 102.6% and 102.8% respectively.

Investment assets during the quarter rose to Rs 51557 crore end September 2024, from Rs 51004 crore end June 2024.

Investment income increased to Rs 1124 crore in Q2FY25 as against Rs 956 crore in Q2FY24.

Capital gains (net of impairment on investment assets) increased to Rs 237 crore in Q2FY25 as compared to Rs 165 crore in Q2FY24.

Industry trend

General Insurance industry delivered a Gross Direct Premium Income (GDPI) growth of 7.0% for H1FY2025 over H1FY2024 impacted by Q2FY25 growth of 2.0%. However, excluding crop and mass health segments the industry registered growth at 10.9% for H1 FY2025 and 6.9% for Q2FY25.

The Health segment during the quarter continued to deliver double digit growth, largely driven by Retail business registering growth of 17.7%.

The commercial lines segment during the quarter was a mixed bag, with industry growth at 2.0%. While Fire segment de-grew at 10.7% on account of pricing pressure, however government spends on infrastructure development and acceleration in private sector investments has spurred positive growth especially in segments such as Engineering, Liability and Marine.

The regulatory environment continues to focus on policyholder’s interest while fostering innovation, competition and sustainable growth for the industry, thereby reinforcing the Authority’s vision of “Insurance for all by 2047.”

Overall, for the medium to long term, the company remains positive that the general insurance industry will continue to grow, given the favourable regulatory changes, low penetration and rising disposable income.

Combined ratio for the industry remained flat at 113.9% for Q1FY25 as against 113.5% for Q1FY2024. For the Motor business, the industry Combined ratio worsened to 125.6% in Q1FY25, from 121.0% in Q1FY2024, which can be largely attributed to an increase in loss ratios.