ICICI Lombard Turns In An Operational Profit In Third Quarter
The company’s combined ratio stood at 96 percent for the first time in the last 15 years.
ICICI Lombard General Insurance Company Ltd.’s operating business turned profitable in the December-ended quarter.
Combined ratio, a measure of its insurance business profitability, improved by 10.6 percentage points to 96 percent for the first time in a decade, the company said in an exchange filing. Underwriting loss, as a result, fell by nearly 76 percent to Rs 28 crore from the corresponding quarter last year.
The insurer’s profit after tax rose 5.2 percent at Rs 232 crore on a year-on-year basis due a low base. “This (growth in bottomline) was a bit muted because last year during the same period the company saw a one-time provision write-back worth Rs 40 crore,” Chief Executive Officer and Managing Director Bhargav Dasgupta said.
Operational Performance
The general insurer’s gross direct premium income rose around 18 percent to Rs 2,937 crore. The highest net premium was recorded by the motor segment at Rs 1,086 crore followed by group/corporate health business which received Rs 215 crore of net premium.
The net premium from the government health business saw a sharp decline of 87 percent to Rs 8 crore, resulting in an underwriting loss of Rs 12.71 crore compared to 10.4 crore in the same quarter last year. “We did not renew the contract on one of the large policies that we had in the previous year. That is why you see a reduction in the government health business,” said Dasgupta.
The insurer’s solvency ratio, which is mandated by the insurance regulator at 1.50 times, stood at 2.21 times compared to 2.01 times in the same period last year. The return on equity also improved by 200 basis points to 22.4 percent.
Expenses on shareholding accounts rose to Rs 72 crore from Rs 16 crore on a year on year basis, driven mostly by provision for doubtful debts (including writing off bad debts) which rose by 463 percent to Rs 55.43 crore.
“This includes a large one-time provision that we made on certain receivables that we had on two policies. These were Rashtriya Swasthya Bima Yojana (RSBY) policies that we wrote in Uttar Pradesh and Kerala,” said Dasgupta. The matter was disputed in court and the order went against the insurer, which is why the company took a one-time hit, Dasgupta added.