ICICI Lombard’s second-quarter profit rose to Rs 1,031 crore, driven by stronger investment income and capital gains, while a combined ratio above 100% showed core underwriting remained loss-making.
ICICI Lombard General Insurance Company Ltd reported a sharp rise in second-quarter profit on Wednesday, helped by stronger investment income and higher capital gains, even as underwriting pressures continued to weigh on core insurance performance. The company’s profit after tax climbed 27.5% year on year to Rs 1,031 crore in the July-September quarter from Rs 809 crore a year earlier. According to the company’s results, it also declared an interim dividend of Rs 7 per share for the first half of the financial year, up from Rs 6.50 a year earlier.
Premium growth was steadier than profit growth. Gross direct premium income rose 3% in the September quarter to Rs 6,792 crore from Rs 6,596 crore in the same period last year. For the first half, gross direct premium income increased 5.4% to Rs 15,110 crore, lagging the broader industry’s 8.9% growth over the same period, the company said. However, excluding crop and mass health insurance, ICICI Lombard’s premium growth was stronger at 13.9% in the quarter, ahead of the industry’s 13.2% pace.
The latest results also show how much the insurer’s earnings were supported by markets rather than underwriting. Investment income rose to Rs 1,554 crore in the quarter from Rs 1,249 crore a year earlier, while capital gains more than doubled to Rs 453 crore from Rs 236 crore. Business Standard reported that net profit came in at Rs 946.4 crore and noted the company’s gross written income rose 9.11% to Rs 7,702 crore, underscoring that different profit measures can tell slightly different stories about the same quarter. Either way, the direction was clear: investments did much of the heavy lifting.
But the underwriting side remained under strain. The combined ratio, a key insurance metric that compares claims and expenses with premium income, rose to 104.5% in the quarter from 103.9% a year earlier, meaning the company spent more on claims and operating costs than it earned from underwriting alone. Excluding major catastrophe losses, the ratio was 102.7%, barely changed from a year earlier. ICICI Lombard said its solvency ratio stood at 2.74 times at the end of September, comfortably above the regulatory minimum of 1.50 times, leaving it with a strong capital buffer even as pressure on margins persisted.
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