ICICI Lombard General Insurance Company conducted conference call on 18 April 2023 to discuss its financial results for the quarter ended March 2023. Bhargav Dasgupta, MD&CEO of the company addressed the call:

Highlights:

The general insurance industry delivered a Gross Direct Premium Income (GDPI) growth of 16.4% for FY2023.

At the same time, the underwriting performance remained weak, with the combined ratio of the industry at 116.2% for 9MFY2023 as against 119.2% in 9MFY2022.

For Motor business, the Combined Ratio for the industry was 123.5% for H1FY2023 which improved to 118.9% for Q3FY2023. While there may be gradual signs of improvement in the Motor segment, the Combined ratio remains higher than FY2022 level which was at 115.6%.

The Authority in current financial year, introduced various reforms seeking to expand the market and increase the penetration of insurance products.

During the quarter the Authority Notified “Expenses of management” and “Payment of Commission Regulations” proposing an aggregate limit at a company level effective from April 2023.

The GDPI of the company grew by 6.7% in Q4FY2023. Excluding crop and one off transaction in Motor segment, the Company grew by 12.6% as against industry growth ex crop by 17.9%.

In the commercial lines, the company experienced robust growth, driven by growth of 15.9% in the SME segment. The company accreted market share across segments such as engineering, liability and maintained market share in the fire segment.

In Motor, the company de-grew by 11.5%. Excluding one off transaction the growth was muted at 0.6% as against the industry growth of 13.1%. The company continued to focus on profitable sub segments using historical granular data and rebalanced portfolio resulting in CV mix at 22.3% and TW mix at 27.8% for FY2023.

Similar to the previous year, the overall Health segment continued to be the fastest growing segment for the industry. During the quarter, the company grew at 31.1%, which was higher than the industry growth of 29.7%.

In Group Health- Employer Employee segment, the change in the underlying industry pricing sentiment resulted in customers moving towards companies with better underwriting and service capabilities resulting in group health segment to grow by 35.7% during the quarter and 43.9% for FY2023.

The GDP has increased 17% to Rs 21025 crore in FY2023 as against Rs 17977 crore in FY2022, against the industry growth of 16.4%. GDPI growth was primarily driven by growth in the preferred segments.

As a result of continued investments in retail health distribution, the company has outgrown the industry for Q4FY2023 with a growth of 19.4% and in the month of March with a growth of 27.0%. This was driven by business sourced through retail health agency vertical growth of 30.9%. Further in the month of February, the company undertook a price increase in retail health indemnity renewal book of 19%.

I would also like to share that one stop solution for all insurance and wellness needs, “IL TakeCare” app, has surpassed 4.6 million user downloads till date. The incremental download for the quarter was close to 1 million. For Q4 FY2023 quarter on quarter growth of premium sourced through this App was 58.4% thus contributing Rs 5511 crore to the GDPI.

Bancassurance and Key Relationship Groups grew at 25.7% this quarter. Within this ICICI Bank distribution grew by 14.2% and non-ICICI Bank distribution grew by 32.2%.

Post pandemic, the recovery in credit growth along with increase in wallet share in distribution partners acquired through the demerger has been the key growth driver.

Business sourced through Digital One team grew by 19.4%.

The company remains on track and is focused on growth levers such as innovation, digital advancements, launching new products, strengthening distribution engine, rationalising cost while scaling up preferred lines of business.

Agents (including Point of sale or POS) count, was around 1,13,000 end March 2023, from 106,119 end December 2022.

The advance premium was Rs 3217 crore end March 2023, as against Rs 3279 crore end December 2022.

The combined ratio was 104.5% in FY2023 as against 108.8% in FY2022. Combined ratio was 104.2% in Q4 FY2023 as against 103.2% in Q4 FY2022.

The company is optimistic about achieving its target combined ratio of 102% by FY2025.

Investment assets rose to Rs 43180 crore end March 2023, from Rs 41451 crore end December 2022. Investment leverage (net of borrowings) was 4.15x end March 2023, as against 4.16x end December 2022.

Investment income was at Rs 2977 crore in FY2023 as against Rs 3000 crore in FY2022. Investment income increased to Rs 817 crore in Q4FY2023 as against Rs 706 crore in Q4FY2022.

Capital gains (net of impairment on equity investment assets) stood at Rs 453 crore in FY2023 as compared to Rs 738 crore in FY2022. Capital gains in Q4 FY2023 was at Rs 159 crore as compared to Rs 136 crore in Q4 FY2022.