ICICI Lombard Posts Underwriting Loss On Flood Claims

ICICI Lombard General Insurance Company made an underwriting loss in its first quarterly filings after listing as the private insurer paid flood claims.

Underwriting loss stood at Rs 85 crore in the quarter ended September compared to Rs 127 crore in the year-ago period, it said in a filing to the exchanges. Combined ratio, which reflects the profitability of its insurance business, improved to 102.9 percent from 108.6 percent. A combined ratio above 100 percent indicates an insurers is paying more claims than the premium it gets.

There were a number of floods across the country in July-September, including in Mumbai, which increased our net claims by about Rs 18 crore, Bhargav Dasgupta, managing director and chief executive officer at ICICI Lombard, told BloombergQuint. “If you remove that one off-event, our combined ratio would have been at 102.1 percent.”

ICICI Lombard’s gross domestic premium income rose 18 percent to Rs 3,173 crore during the quarter. It’s indicative of an insurance company’s gross revenue. Maximum growth in the premium income came from crop, motor and retail health portfolio, Dasgupta said.

• The combined ratio improved as the insurer’s incurred claim ratio, which indicates the total claims paid, reduced to 78.5 percent from 83.8 percent year-on-year.
• Expense ratio increased by 50 basis points to 22.9 percent as management expenses rose to Rs 733 crore from Rs 594 crore last year.
• The management expenses grew due to an increase in employee pay and welfare benefits, business support services.
• Solvency margin improved to 2.18 times the fair value of its liabilities as of September 30 from 2.03 times a year ago. The minimum solvency requirement is 1.50.
• Profit after tax stood at Rs 204 crore, up 19 percent over the same period last year.
• Investment income grew marginally to Rs 371 crore.

ICICI Lombard also announced an interim dividend of Rs 75 per share for its shareholders.