ICICI Lombard Q3 Results Review - Sustainable Return On Equity Declines: Yes Securities
The motor segment growth is sluggish since ICICI Lombard continues to focus on profitable segments within the space.
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Yes Securities Report
ICICI Lombard General Insurance Company Ltd.'s motor segment grew 4.7% YoY within which, motor third party has grown 10.1% YoY whereas, motor own damage has de-grown -0.9% YoY. The motor segment growth is sluggish since ICICI Lombard continues to focus on profitable segments within the space.
The market remains competitive in the private car space whereas, two-wheeler and commercial vehicle are relatively more profitable. The overall combined ratio of the motor industry is 124% and, while the company did not anticipate this competitive intensity, it did not make sense for it to pursue such business at this point in time.
Overall health segment growth was 47.9% YoY compared with 24.9% for the industry. The retail health agency segment grew 40.1% YoY as the agents recruited earlier have started to deliver. Management opined that 40% growth in retail health agency is sustainable.
Group health is also growing faster than the industry and the banca channel is contributing well. ICICI Bank Ltd. distribution grew 30.9% YoY whereas non-ICICI distribution grew 44.2% YoY. Group health has been largely driven by credit growth and a bit by wallet increase but growth may slow somewhat from a high base.
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