Analyst Meet / AGM     17-Jan-18
Conference Call
ICICI Lombard General Insurance Company
Focus continues on prudent underwriting and maintaining leadership position
ICICI Lombard General Insurance Company conducted a conference call on 16 January 2018 to discuss its financial results for the quarter ended December 2017. Bhargav Dasgupta, Managing Director & CEO and Gopal Balachandran, Chief Financial Officer of the Company addressed the call:

Highlights:

  • As per the company, the General Insurance Industry has continued to grow at a robust pace in FY2018 and registered 18.9% growth in gross direct premium collection in April-December FY2018 over April-December FY2017 and posted 17.7% rise in the Q3FY2018.
  • The industry has exhibited positive performance trend in the combined ratio, which improved to 111.60% in H1FY2018 from 115.90% in H1FY2017.
  • As per the company, the general insurance industry is moving in the right direction in terms of improving underwriting discipline, while the growth momentum remains strong.
  • The company has recorded 17% growth in the gross direct premium (GDPI) to Rs 9431 crore in 9MFY2018 compared to Rs 8059 crore in 9MFY2017, while GDPI increased 17.8% in Q3FY2018 was 17.8% over Q3FY2017.
  • The number of policies issued surged to 17.60 million in 9MFY2018 from 12.83 million polices issued in 9MFY2017. The number of polices issued were 7.01 million in Q3FY2018 against 4.92 million policies issued in Q3FY2017.
  • The company has continued to maintain a diversified portfolio with motor insurance contributing to 42% of the GDPI followed by health and personal accident to 18%, crop insurance and property insurance to 20% each. The company has been cautious in underwriting Crop insurance as a result of which the contribution of crop insurance has reduced to 20% in 9MFY 2018 from 25% in H1FY2018.
  • On the profitability front, the company has registered a significant improvement in Combined Ratio to 100.4% in 9MFY2018 from 106.2% in 9MFY2017. The Combined ratio improved to 96.0% in Q3FY2018 from 106.6% in Q3FY2017.
  • The emphasis on prudent risk selection has resulted in an improvement in loss ratio to 76.3% in 9MFY2018 from 82.1% in 9MFY2017. On a quarterly basis, loss ratio improved to 72.5% in Q3FY2018 from 79.8% in Q3FY2017.
  • The investment assets of the company increased to Rs 17318 crore end December 2017. The investment leverage (net of borrowings) was 3.89x at end December 2017.
  • Investment income for 9MFY2018 increased to Rs 1176 crore from Rs 1027 billion in 9MFY2017, while it increased to Rs 350 crore in Q3FY2018 from Rs 344 crore in Q3FY2017.
  • Capital Gains for 9MFY2018 increased to Rs 403 crore from Rs 369 crore in 9MFY2017. Capital Gains in Q3FY2018 was lower at Rs 83 crore compared to Rs 114 crore in Q3FY2017.
  • The company has recorded 43% growth in the PBT to Rs 322.35 crore in Q3FY2018 and 37% surge to Rs 909 crore in 9MFY2018. The net profit has moved up 5% to Rs 232 crore in Q3FY2018 and 25% to Rs 650 crore in 9MFY2018.
  • The net profit for Q3FY2017 and 9MFY2017 includes effect of excess tax provision written back of earlier years of Rs 40 crore. The net profit growth for Q3FY2018 and 9MFY2018 would be 29% and 35% respectively adjusting for the above tax written back.
  • The company has made provision of Rs 55 crore towards doubtful debts. The company received orders from the National Grievance Redressal Commission (NGRC) in favor of the government with respect to disputed receivables pertaining to erstwhile government sponsored mass health scheme underwritten by the company. The company has further appealed against the order, while made provisions in accounts of Q3FY2018 and 9MFY2018.
  • The company has improved Return on Average Equity (ROE) to 21.1% in 9MFY2018 and 22.4% in Q3FY2018. The Solvency ratio was 2.21x end December 2017 as against 2.01x end December 2016 and remains above the minimum regulatory requirement of 1.50x.
  • The company continues to focus on prudent underwriting while retaining its leadership position amongst private sector general insurance companies.
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