Two insurance subsidiaries under India’s ICICI Group – ICICI Lombard General Insurance and ICICI Prudential Life Insurance – posted contrasting financial outcomes for the fourth quarter.
The results were driven by rising claims, regulatory adjustments, and shifts in insurance product demand.
According to Reuters, ICICI Lombard – a non-life insurer affiliated with ICICI Bank – reported a 2% year-on-year decline in net profit to 5.10 billion rupees (approximately US$59.5 million) for the three-month period ending March 31. The earnings result missed analyst expectations, with consensus forecasts projecting profit around 5.92 billion rupees, based on LSEG estimates.
The quarterly downturn was primarily attributed to a significant increase in claims payouts, which rose 25.5% to 35.10 billion rupees. Although gross written premiums increased 10% from the same period last year to 69.04 billion rupees, this marked a slower growth pace compared to the 17% recorded in the prior-year quarter.
Analysts pointed to a regulatory update implemented in October that required insurers to recognise long-term policy premiums over the full policy duration rather than upfront. This change reportedly affected the quarterly premium figures.
In terms of product segments, ICICI Lombard saw continued momentum in retail health coverage, with premiums in this area climbing approximately 30%, while its motor insurance segment recorded an 18% increase. The insurer also maintains a presence in marine and agricultural insurance.
Operational efficiency, as measured by the combined ratio, rose slightly to 102.5%, up from 102.3% a year earlier. A ratio above 100% suggests the company paid out more in claims and expenses than it collected in premiums.
These results come amid a broader upward trend in India’s general insurance industry. According to analytics firm GlobalData, the country’s general insurance market is forecast to grow at a compound annual growth rate of 9.9%, reaching a gross written premium of 4.89 trillion rupees (US$57.3 billion) by 2028, up from 3.35 trillion rupees (US$40.4 billion) in 2024.
On the life insurance side, ICICI Prudential recorded a strong quarterly performance, with net income more than doubling to 3.86 billion rupees (US$45 million), supported largely by higher uptake of group insurance policies – typically offered by employers to their workforce.
Net premium income for the quarter increased 11% to 16.37 billion rupees, aided by a 30% rise in single premium business, according to Reuters.
However, the insurer reported a decline in unit-linked insurance plan (ULIP) sales, following volatility in India’s equity markets. ULIPs, which combine investment and insurance, had previously gained popularity during market upswings but lost traction in the face of recent corrections. ULIPs accounted for 48.3% of the product mix during the quarter, down from 50.8% in the prior year.
ICICI Prudential’s value of new business – a metric reflecting expected profits from newly issued policies – rose 2.5% to 7.95 billion rupees. However, annualised premium equivalent (APE), which includes both single and recurring premium income, declined 3.1% to 35.02 billion rupees. The firm’s full-year value of new business margin also slipped to 22.8% from 24.6% the previous year.
