ICICI Lombard Expects To Align Motor Segment Growth With Industry, Says CFO
The objective is to try and grow in line with the market by year-end, the CFO said.
ICICI Lombard General Insurance Co. saw its revenue and net premiums rise by 12% year-on-year in the quarter ended September, with the motor segment showing growth.
"In Q1, the industry grew at 21%, while we grew at 5% in motor. In Q2, our growth was 11%, while industry growth was 14%, so there are clear signs of the gap between us and the industry growth narrowing down over the next couple of quarters," Gopal Balachandran, chief financial officer of ICICI Lombard, told BQ Prime.
The objective is to try and grow in line with the market by year-end, he said.
The company has, however, reported faster-than-market growth in retail health on a quarterly and half-year basis, which has led to a small improvement in market share. This is the effect of their continued investments in distribution, according to Balachandran. The company is comfortable with a 65-70% loss ratio, and the loss experience is in line with this range, he said.
On the group health front, the company incurred an operating loss against a profit last year. Q2 typically has higher incidences of claims due to the monsoon, and the portfolio must be seen on a yearly basis, the CFO said. On an overall basis, the company is comfortable with a loss ratio of 94–95% because the cost of acquisition of such businesses is in the low single digits, and this overall aligns with its combined ratio target, he said.
In the corporate health space, ICICI Lombard grew at 31%, as against 24-25% growth in the industry, he said.
Overall, a change in management guidelines for expenses will let the company underwrite business at comfortable levels once 50% of the players who are above the recommended threshold for EOM start getting better on their expenses, Balachandran said.
The company has maintained its combined ratio target of 102% by the end of fiscal 2025. Balachandran expects the company to continue delivering growth 100–200 basis points higher than the overall industry. The industry's growth has typically been in the range of 15–16%, he said.
Thus, ICICI Lombard can be expected to achieve high-teen growth.