 "ICICI Lombard")
ICICI Lombard (ICICIGI) reported 12 per cent year-on-year (Y-o-Y) net earned premium (NEP) growth in Q2FY26. Net profit jumped 18 per cent Y-o-Y, driven by improved loss ratio and realisation of capital gains (₹2,360 crore) on the investment book.
But ICICI Lombard lost market share across several segments and lags industry growth for H1, despite a pick up in September.
The company continues to dominate in motor and commercial lines, and is building capability in retail health. It remains a leader in terms of profitability.
It has seen a more limited impact of input tax credit (ITC) losses and there are tailwinds from higher new vehicle sales and goods and services tax (GST) exemption for healthcare. This makes healthcare more affordable and may expand coverage.
The company intends to pass on the full GST benefits.
The reported net profit of ₹820 crore in Q2FY26, up 18 per cent Y-o-Y and for H1FY26, net profit grew 23 per cent to ₹1,570 crore. Mid-teen earnings growth is possible, going forward, with return on equity (RoE) of around 17.5 per cent with guidance for medium-term RoE of 18-20 per cent.
On the flip side, gross written premium (GWP) growth was low at 1.6 per cent Y-o-Y in Q2FY26 and 3.5 per cent on an ex-crop and mass-health basis.
Natural catastrophic (NatCat) losses were high on account of floods with a claims ratio of 72.1 per cent (up 72 basis points or bps Y-o-Y) and a combined ratio of 105.1 per cent (up 68 bps) in Q2FY26. NEP grew 12 per cent Y-o-Y to ₹5,650 crore in Q2 and for H1FY26, NEP grew 13 per cent to ₹10,800 crore.
NEP growth of 12 per cent Y-o-Y was driven by 10 per cent Y-o-Y growth in motor and 22 per cent Y-o-Y growth in health. The marine segment saw Y-o-Y growth of 4 per cent, while the fire segment was flat.
The commission ratio increased to 19.1 per cent against 17.5 per cent in Q2FY25, and operating expense (opex) ratio came in at 14 per cent versus 15.6 per cent in Q2FY25. The combined ratio was at 105.1 per cent in Q2FY26 versus 104.5 per cent in Q2FY25.
The company outperformed the motor segment in terms of profitability through strong underwriting discipline. Early trends following GST rate cuts indicate good momentum for auto demand. Further market share gains may be on the cards.
ICICIGI’s retail health segment outpaced the industry, with market share rising to over 4 per cent by September 2025, driven by product innovation, wider distribution, and stronger customer engagement.
But group health declined in H1FY26. The company aims at a retail health loss ratio of 65-70 per cent.
Gross direct premium income (GDPI) declined 1.9 per cent Y-o-Y to ₹6,600 crore in Q2FY26. Underwriting loss stood at ₹180 crore versus a loss of ₹160 crore in Q2FY25. Total investment income on policyholders’ accounts was at ₹930 crore.
Duration of the investment book is 4.74 years, with a portfolio yield of 7.39 per cent. The investment book grew 9 per cent to ₹56,200 crore, and absolute investment yield for Q2FY26 stood at 2.2 per cent, flat Y-o-Y. For H1FY26, it stood at 4.6 per cent versus 4.5 per cent for H1FY25.
The investment portfolio mix for corporate bonds, G-Sec, equity (including equity ETF) was at 47.6 per cent, 34.0 per cent, and 14.4 per cent, respectively, for H1FY26. Robust investment gains resulted in RoE of 20.8 per cent in H1FY26 versus 20.3 per cent in H1FY25. The solvency ratio was at 2.73 times (2.65 times in Q2FY25 and 2.7 times in Q1FY26).
Further momentum is anticipated in H2FY26, due to favourable regulatory changes and GST 2.0.
Motor and health segments could see rising volumes and ICICI Lombard is well-placed here.
