ICICI Lombard Q1 Results: Profit falls 46% on commercial insurance slowdown, higher claims
ICICI Lombard reported a dramatic forty-six percent drop in profit for the first quarter, attributed to a downturn in commercial insurance and heightened claims payments. Despite these challenges, demand for retail health insurance remains strong,...
By Reuters |
India's ICICI Lombard General Insurance reported a 46% drop in first-quarter profit on Wednesday, hurt by weakness in the commercial insurance segment and a rise in claims paid.
Profit after tax for the general insurer fell to 4.03 billion rupees ($41.87 million) for the three months ended June 30, from 7.47 billion rupees a year earlier.
While analysts had predicted pricing pressure in commercial insurance - particularly the fire segment - as a drag, robust demand for retail health insurance following tax cuts and motor insurance backed by healthy vehicle sales provided support.
The commercial segment contracted 13.8%, primarily led by heightened competitive intensity in the fire segment, the company said.
The company incurred two large fire insurance losses worth about 630 million rupees. It also took a 1.65 billion rupees charge to strengthen reserves for motor insurance claims following a Supreme Court ruling, without providing further details.
Its claims paid rose nearly 21% to 35.16 billion rupees.
ICICI Lombard's retail health gross premiums rose 69.5% year-on-year. Motor insurance, the company's largest segment, grew 14% during the quarter.
The insurer's combined ratio worsened to 107.2% from 101.2% in the previous quarter, meaning claims and expenses exceeded premium income. A reading below 100% indicates underwriting profitability.
Backed by ICICI Bank, one of India's largest private lenders, ICICI Lombard offers marine, crop and travel insurance, in addition to motor and health coverage.
Profit after tax for the general insurer fell to 4.03 billion rupees ($41.87 million) for the three months ended June 30, from 7.47 billion rupees a year earlier.
While analysts had predicted pricing pressure in commercial insurance - particularly the fire segment - as a drag, robust demand for retail health insurance following tax cuts and motor insurance backed by healthy vehicle sales provided support.
The commercial segment contracted 13.8%, primarily led by heightened competitive intensity in the fire segment, the company said.
The company incurred two large fire insurance losses worth about 630 million rupees. It also took a 1.65 billion rupees charge to strengthen reserves for motor insurance claims following a Supreme Court ruling, without providing further details.
Its claims paid rose nearly 21% to 35.16 billion rupees.
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ICICI Lombard's retail health gross premiums rose 69.5% year-on-year. Motor insurance, the company's largest segment, grew 14% during the quarter.
The insurer's combined ratio worsened to 107.2% from 101.2% in the previous quarter, meaning claims and expenses exceeded premium income. A reading below 100% indicates underwriting profitability.
Backed by ICICI Bank, one of India's largest private lenders, ICICI Lombard offers marine, crop and travel insurance, in addition to motor and health coverage.
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