ICICI Lombard's Second-Quarter Profit Rises 15% to ₹946 Crore as Premium Growth Lags the Industry and the Combined Ratio Climbs to 107%

ICICI Lombard General Insurance Company, one of India's largest private general insurers, reported its results for the quarter ended September 30, 2026, on October 14. On the 1/n accounting basis, which spreads the premium of long-term products over the policy term as mandated by the insurance regulator from October 1, 2024, the company's profit after tax for the second quarter of the 2027 financial year was ₹9.46 billion, or ₹946 crore, up 15.5 per cent from ₹8.20 billion a year earlier. On the 'n' basis, which the company uses for its headline growth figures, profit after tax was ₹10.31 billion, up 27.5 per cent from ₹8.09 billion. For the first half of the year, profit after tax was lower: ₹14.54 billion on the 'n' basis against ₹15.43 billion, a fall of 5.8 per cent, and ₹13.50 billion on the 1/n basis against ₹15.67 billion, a fall of 13.9 per cent. The filing does not detail the reasons for the first-half decline beyond pointing to the first quarter.

The premium figures show why the headline profit was not matched by growth. Gross direct premium income, which is the premium written directly by the insurer, rose 3.0 per cent to ₹67.92 billion on the 1/n basis, against industry growth of 7.0 per cent. On the 'n' basis it grew 4.7 per cent to ₹72.84 billion. For the first half, the figures were ₹151.10 billion, up 5.4 per cent, against industry growth of 8.9 per cent. Excluding crop and mass health insurance, two segments that the company reports separately, premium grew 13.9 per cent in the quarter against 13.2 per cent for the industry, and 10.4 per cent in the half-year against 12.6 per cent. The slower headline growth therefore comes from crop, mass health and fire, rather than from the core retail lines, although the filing does not give the crop figures. The reports do not give crop premium figures.

The segment breakdown shows a business growing quickly in some lines and shrinking in others. Health, travel and personal accident premium rose 26.8 per cent against 18.9 per cent for the industry, and retail health grew 64.0 per cent against 32.3 per cent for the industry, taking its exit market share to 5.0 per cent in September 2026. Group health grew 13.9 per cent, below the industry's 16.9 per cent. Motor premium grew 12.0 per cent, with private car insurance up 3.4 per cent, two-wheelers up 24.7 per cent and commercial vehicles up 19.3 per cent. New vehicle insurance grew 38.5 per cent against 26.9 per cent for the industry, and new two-wheeler business grew 50.8 per cent. Motor market share was 10.3 per cent in the half-year. Fire insurance premium fell 21.2 per cent in the quarter and 28.5 per cent in the half-year, with a decline of 6.0 per cent in September alone. Total commercial premium grew 1.7 per cent in the quarter and fell 8.1 per cent in the half-year, but excluding fire it grew 20.0 per cent in the quarter.

Underwriting profitability is the weak point. The combined ratio, which adds claims and expenses as a share of premium, was 107.0 per cent on the 1/n basis against 105.1 per cent a year earlier, and 104.5 per cent on the 'n' basis against 103.9 per cent. Excluding catastrophe losses of ₹1.18 billion, compared with ₹0.73 billion a year earlier, it was 105.3 per cent on the 1/n basis. Business Today described the ratio as up 190 basis points year on year, with the ex-catastrophe ratio up 150 basis points. A combined ratio above 100 per cent means that claims and costs exceed premium, so the company made an underwriting loss in the quarter. The total loss ratio was 72.7 per cent against 72.1 per cent, and in the half-year was 74.5 per cent against 72.5 per cent. By segment, the quarterly loss ratio was 61.7 per cent in motor, 85.3 per cent in health, travel and personal accident, 67.5 per cent in fire and 75.9 per cent in marine. The filing does not disclose a separate expense ratio.

Investment income carried the profit. Total investment income for the quarter was ₹15.54 billion, against ₹12.49 billion a year earlier, including capital gains of ₹4.53 billion against ₹2.36 billion. Business Today put the rise in investment income at nearly 29 per cent. The realised return was 2.47 per cent for the quarter against 2.19 per cent, and unrealised gains stood at ₹24.02 billion on September 30. In simple terms, the gap between the underwriting loss and the investment gains is where the profit came from, which makes earnings more dependent on markets than the premium growth figures suggest.

Capital is strong. The solvency ratio was 2.74 times on the 'n' basis at September 30, against 2.68 times at June 30 and a minimum regulatory requirement of 1.5 times. The board declared an interim dividend of ₹7.00 per share for the first half, against ₹6.50 for the same period last year. Return on average equity was 23.7 per cent in the quarter on an annualised basis against 21.3 per cent. The company reported that retention improved by about 4 per cent in the half-year, attributing it to digital and artificial-intelligence-enabled renewal execution, and that 99.4 per cent of policies were issued electronically.

Management commentary reported by Business Today said that combined ratio pressure should ease as operating efficiencies improve, and that no further reserve build is needed after the Supreme Court judgment on unpaid domestic labour claims in motor third-party business. It also said changes to commission caps and expense-of-management rules are expected to support industry volumes, and that compliant insurers may gain market share. The same report said Macquarie maintained an Outperform rating with a 12-month target price of ₹1,820, about 6.9 per cent above the ₹1,715.70 close of October 14. That is a brokerage opinion and not a measure of the company's performance.

What to watch in the coming quarters is whether the combined ratio comes down as management expects, whether premium growth in fire stabilises, and whether the rapid growth in retail health is matched by a loss ratio that remains acceptable. For the industry, the results illustrate a market with strong demand for health and vehicle cover and pricing that has not yet fully caught up with claims costs.