ICICI Lombard Q4 Results: Profit Falls 10% Even As Net Premiums Rise
The private insurer's profit fell 10% year-on-year to Rs 313 crore in the quarter ended March.
ICICI Lombard General Insurance Co.'s fourth-quarter profit fell, missing estimates, even as net premiums earned rose.
The private insurer's profit fell 10% year-on-year to Rs 313 crore in the quarter ended March, it said in an exchange filing. That compares with the Rs 344-crore consensus estimate of analysts tracked by Bloomberg.
The bottom line was impacted by a 67% increase in expenses not related to the insurance business that amounted to Rs 775 crore. Also, underwriting loss and sales promotion expenses rose in the reported period.
"The increase in expenses is due to reclassification of segmental expenditure exceeding the mandated regulatory limits," the company's management said in response to BloomberQuint's query during a post-earnings conference call. "Also, hiring of new sales agency managers has led to a higher expenditure, increasing expenses that are not commensurate with the business generated by the new agents."
Net premiums earned for the quarter, however, were up 27% over a year earlier at Rs 3,318 crore.
The company expects to grow in mid-teens for their overall non-crop business in FY23 as against an anticipated 11-12% industry growth, the management said in response to BloombergQuint's query on the media call.
ICICI Lombard Q4 FY22 Highlights (YoY)
Revenue rose 33% to Rs 4,636 crore, against the estimated Rs 3,365 crore.
Ebitda increased 29% to Rs 1,010 crore. This is on account of a rise in operating profit across all its major segments—fire, marine, health, motor and even crop business. Only the miscellaneous retail category suffered a loss this quarter.
Margins stood at 21.8% versus 22.4%.
Earnings per share stood at Rs 6.37 apiece against Rs 7.61 a year ago and Rs 6.76 forecast.
Solvency ratio stood at 2.46 versus 2.9, higher than the minimum regulatory requirement of 1.50.
Incurred claim ratio increased to 72% from 71.7%, while the net retention ratio rose to 79.5% from 77.7%.
Combined ratio, calculated by adding incurred losses and expenses and dividing them by the premium earned, stood at 103.2% against 101.8%.
The board has recommended a final dividend of Rs 5 apiece subject to approvals, taking the overall dividend for FY22, including proposed final dividend, to Rs 9. That compares with Rs 4 apiece paid out last year.
Yearly Highlights
Net premiums earned rose 30% to Rs 13,032 crore.
Operating profit was down 8% to Rs 1,794 crore. This was mainly on account of the health retail and corporate segment incurring losses against past profits.
After-tax profit fell 14% to Rs 1,271 crore, impacted by an increase in claims and underwriting losses.
Ebitda margin was at 11.1% against 16.1%.
Incurred claims ratio stood at 75.1% against 68.6%.
Net retention ratio declined to 72.7% from 74.6%.
Combined ratio stood at 108.8% compared with 99.8% a year ago.
Return on average equity was 14.7% versus 21.7%.