ICICI Lombard General Insurance Company (ICICIGI) Q4 19/20 earnings summary

Executive summary

• FY2020 PAT rose 13.8% to ₹11.94bn and operating profit rose 25.4% to ₹15.44bn; GDPI fell 8.1% to ₹133.13bn as crop exposure was deliberately reduced.

• Excluding crop, GDPI grew 10.5% to ₹133.02bn; solvency remained above the 1.50x regulatory minimum at 2.17x.

• COVID-19 created near-term uncertainty and was expected to weigh on Q1 FY2021 new business, while digital operations supported customer service and business continuity.

Financial highlights

• GDPI was ₹133.13bn vs ₹144.88bn YoY; excluding crop, GDPI was ₹133.02bn vs ₹120.36bn, up 10.5%.

• Gross written premium declined 8.1% to ₹135.92bn; net written premium rose 1.1% to ₹96.40bn and net earned premium grew 12.3% to ₹94.04bn.

• PAT increased 13.8% to ₹11.94bn; PBT rose 6.2% to ₹16.97bn and basic EPS was ₹26.27 vs ₹23.11.

• Operating profit increased 25.4% to ₹15.44bn; net claims incurred rose 8.6% to ₹68.52bn, below NEP growth of 12.3%.

• Investment assets grew to ₹263.27bn from ₹222.31bn; revenue-account investment income was ₹15.43bn vs ₹13.35bn.

Outlook and guidance

• Q1 FY2021 top-line growth was expected to be negatively affected by lockdown-related reductions in new business; renewals were expected to continue generating revenue.

• Strategy prioritised profitable underwriting, cautious exposure to lumpy tender-driven segments, higher ROE without sacrificing profitability, and maintaining the combined ratio at optimal levels.

• At least 50% of employees were envisioned to continue working from home after lockdown, supported by digital infrastructure.

• Long-term opportunity was tied to low Indian non-life penetration of 0.97% of GDP versus a 2.78% global average.