ICICI Lombard General Insurance Company (ICICIGI) Q4 09/10 earnings summary

Executive summary

• FY10 PAT rose to Rs 1,439.3m from Rs 236.2m; profit before tax was Rs 1,583.1m, supported by a return to underwriting profitability and higher investment income.

• Private-sector market share was 23.2% and overall industry share 9.5%; focus areas included risk-based underwriting, cost control, customer service and distribution efficiency.

Financial highlights

• Audited gross premium written was Rs 36,947.8m vs Rs 37,492.1m in FY09; net earned premium increased to Rs 21,928.2m from Rs 19,736.5m.

• Operating insurance profit was Rs 123.5m vs a loss of Rs 877.6m; income from investments rose to Rs 4,454.3m from Rs 3,222.2m.

• Basic EPS was Rs 3.57 vs Rs 0.60; diluted EPS was Rs 3.51 vs Rs 0.59.

• Operating expenses fell 18% YoY; the premium-per-employee measure for the retail sales team improved 97%.

Outlook and guidance

• FY11 marks year four after detariffing; industry experience cited in the report suggests pricing recovery typically begins from the fourth year, while competitive pressure remains.

• Priorities include differentiated products, operational efficiency, improved distribution reach and deeper relationships with existing corporate clients; no numerical financial guidance was stated.