Synopsis
ICICI Lombard shares tumbled 15% after the insurer reported a 46% YoY decline in Q1 FY27 net profit to Rs 403 crore, hit by large fire claims and the Supreme Court's Motor TP verdict. While gross premium income rose 7.5% to Rs 8,318 crore, the combined ratio worsened to 107.2% from 102.9% a year ago.
Shares of ICICI Lombard General Insurance plunged 15% to an intraday low of Rs 1,544 on Thursday after the company reported a 46% year-on-year decline in Q1 FY27 net profit.
According to a filing with the exchange, the profit after tax for the general insurer fell to Rs 403 crore for the first quarter from Rs 747 crore a year earlier. The company further said that, excluding the impact of the two large losses in the fire segment and the judgment of the Honourable Supreme Court on the Motor TP portfolio, the PAT shrunk 23% and stood at Rs 575 crore in Q1 FY2027.
The company incurred two large losses under the fire segment, amounting to Rs 63 crore, which impacted the combined ratio by 1.0%. The Judgement of the Honourable Supreme Court resulted in an increase in claim reserves of Rs 165 crore in our Motor TP portfolio, which had an additional impact on our combined ratio of 2.8%.
The combined ratio (CoR) stood at 107.2% in Q1 FY2027 compared to 102.9% in Q1 FY2026. The gross direct premium income (GDPI) of the company was Rs 8,318 crore in Q1 FY2027, compared to Rs 7,735 crore in Q1 FY2026, representing a 7.5% growth, which is lower than the industry growth of 10.9%.
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After excluding the impact of the above two claims, the combined ratio for Q1 FY2027 stood at 102.3% as against 102.2% for Q1 FY2026. The capital gains (net of impairment on investment assets) stood at Rs 183 crore in Q1 FY2027 compared to Rs 380 crore in Q1 FY2026.
The profit before tax (PBT) tumbled 46.1% to Rs 536 crore in Q1 FY2027 compared to Rs 994 crore in Q1 FY2026. Solvency ratio was at 2.71x as at June 30, 2026 as against 2.67x as at March 31, 2026, which was higher than the minimum regulatory requirement of 1.50x.
In the motor segment, the growth stood at 14.0% for Q12027 against the industry growth of 13.9%, which was primarily led by new sales coming from growth in the non-OEM channels, specifically in Two-Wheeler and Commercial vehicles. The new sales on a unit basis stood at 33.6% for the Company as against the industry growth of 14.9%.
The commercial segment dropped 13.8%, primarily led by the heightened competitive intensity and significant pricing pressure experienced in the fire insurance business, which impacted premium growth across the portfolio.
The retail health (included under Individual) delivered a robust growth of 69.5% for Q12027 as against industry growth of 31.6%. Higher sum assured (≥Rs 10L) mix increased to 96.4% for Q12027 from 84.5% for Q12026, in fresh health business.
On the other hand, the group health segment recorded a growth of 16.3% for Q12027, with our market share being 10.3% for Q12027.
In the past one year, the stock slumped 18%, whereas, in the last three months, the stock dropped 14%.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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