ICICI Lombard Q1 net rises 35% on high premiums, lower combined ratio

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Mumbai | Published: July 18, 2018 2:16:50 AM

ICICI Lombard General Insurance on Tuesday reported a 35.1% rise in its profit to Rs 289 crore in the first quarter of this financial year, largely due to the lower combined ratio and higher premiums.

The company’s net profit in the corresponding quarter of 2017-18 was at Rs 214 crore. (Reuters)

ICICI Lombard General Insurance on Tuesday reported a 35.1% rise in its profit to Rs 289 crore in the first quarter of this financial year, largely due to the lower combined ratio and higher premiums.

The company’s net profit in the corresponding quarter of 2017-18 was at Rs 214 crore. Bhargav Dasgupta, managing director and chief executive officer of ICICI Lombard General, Insurance said: “The improvement is largely because of our ongoing focus on sustainable and profitable growth segments. We do a lot of work related to pricing strategies and risk selection to ensure that we don’t end up writing business that is unsustainable. Additionally we have also seen significant improvement in expense ratio largely driven by distribution cost that have come down and also some saving we have done through automation and technology initiative. All such initiatives have led to improvement in combined ratio.”

The combined ratio of ICICI Lombard General Insurance improved to 98.8% in Q1 of this financial year from 102.4% a year ago. While the expense ratio dropped to 21.9% in Q1 from 24.3% in last fiscal.

Gross Direct Premium Income increased to Rs 3,774 crore in 01 FY2019 compared to Rs 3,321 crore in Q1 FY2018, registering a growth of 13.7% for ICICI Lombard. While market share increased to 10.1% in first quarter of FV2019 compared to 10.0% in Q1 FY2018. In terms of product portfolio, Motor OD (Own Damage) and Motor Third Party (TP) comprises of 20% and 15% respectively for ICICI Lombard. While Crop Insurance has share of 21% and Health and PA constitute 20% for ICICI Lombard. In his post earnings conference call, Dasgupta also added that, we have to ensure that pricing is sustainable from the long term perspective in Ayushman Bharat-National Health Protection Mission (AB-NHPM).

“First state which got tendered was Nagaland, we saw other companies have done in term of pricing so we are watching out closely. Honestly, at this point of time I dont share publicly what will be our strategy. Its very important and game changing scheme which government has announced. But we have to ensure that pricing is sustainable from a long term perspective, otherwise you will not be able to provide quality service, its a tender driven business and we will watch how the market develops in term of pricing and will take call accordingly.”

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