ICICI Lombard General Insurance Company Ltd (ICICIGI) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Good evening, ladies and gentlemen. A very warm welcome to ICICI Lombard General Insurance Company Limited's Q2 and H1 FY '27 earnings conference call. From the senior management, we have with us today Mr. Sanjeev Mantri - MD & CEO of the company, Mr. Gopal Balachandran - CFO, Mr. Anand Singhi - Chief Corporate International, Bancassurance, Government Business, Mr. Girish Nayak - Chief Enterprise, AI and Technology, Mr. Sandeep Goradia - Chief Retail Business Strategy
Moderator: and Solutions team, Mr. Gaurav Arora, Chief, Commercial Lines and Motor, Underwriting and Claims; and Mr. Girish Sehgal, Chief, Health Underwriting and Claims, Customer Service. Please note that any statements, comments are made in today's call that may look like forward-looking statements are based on information presently available to the management and do not constitute an indication of any future performance as future involve risks and uncertainties, which could cause results to differ materially from the current views expressed, being expressed. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. I now hand the conference over to Mr. Sanjeev Mantri, MD and CEO, ICICI Lombard General Insurance Company Limited. Thank you, and over to you, sir.
Sanjeev Mantri (ICICI Lombard General Insurance Company Ltd): Thank you. Good evening to each one of you. Thank you for joining the earnings conference call of ICICI Lombard for half year ended September 30th. I would like to commence with an overview of the economic and industry trends followed by our company's performance in key initiatives. Our CFO, Gopal Balachandran, will take you through the financial performance for the year ended 30th September 30th. The domestic economy continued to have its growth momentum with real GDP expanding at 7.8% year-on-year in quarter 1. Economic activity remained firm, aided by private consumption, manufacturing growth, and investment spendings. Supportive monetary and fiscal policies helped cushion the impact of the ongoing conflict in West Asia and broader geopolitical tensions on domestic economic activity. Looking at specific industries in context of our business, the automobile sector, basis data from Vahan, continued to witness strong double-digit growth across key segments during H1 of 2027 with total vehicle sales reaching 15.6 million, showing a growth of 21.1%. More importantly, the growth of the industry across all segment was higher in quarter 2 2027 than quarter 1 2027, with the overall growth in Q2 being at 26.9% against Q1 growth of 16%. September 2026 was particularly a strong month, with total vehicle sales growing at 32%. This sustained demand provides a healthy base as we enter the key festive season. Bank credit remained robust at approximately 19.6% in quarter 2 2027 compared with 17.6% in the preceding quarter. Lending to industries, services, and agriculture grew between 15% to 20%, including approximately 15% growth in credit to large industries. These trends indicate broad-based credit demand and supporting financing condition conditions across both business investment and household consumption, which is always a positive for our sector. Talking about regulatory update, as you would be aware, IRDAI has recently released a landmark consultation paper titled 'Recalibrating Economics of Insurance Distribution', which seeks to address the evolving needs of the insurance sector with the underlying emphasis on transparency, customer trust, and distribution efficiency. This is expected to result in simplifying distribution structures, improving accessibility, and enhancing customer experience. We believe that the broad objectives outlined in the paper are aligned with the long-term vision of 'Insurance for all'. Further, the GST Council in its meeting held on October 8, 2026, has recommended further process reforms along with certain measures for trade facilitation and streamlining compliances. Within this, an important clarification relates to removal of restrictions on availing input tax credit on group health and life insurance. This recommendation will ensure a smaller a smoother flow of ITC across the supply chain. Let me now dwell upon the industry performance for the period ended September 30th. The general insurance industry continued to demonstrate steady GDPI growth of 8.9% in H1 supported by 10.9% in quarter 1 and 7% in quarter 2 2027. However, the GDPI growth, excluding crop and Mass Health segment, was 12.6% in H1 of 2027. Speaking of specific
Sanjeev Mantri (ICICI Lombard General Insurance Company Ltd): 7 as compared to the preceding quarter. Most of the key segments, namely Engineering, Marine, Liability, and Miscellaneous etc., that is the segment sans fire insurance collectively reported a healthy growth of 15.9% for Q2 2027. While the fire segment continued to witness a degrowth of 26.6% for H1 2027, the pace of decline moderated to 24.4% in Q2, as against 27.8 in Q1 of 2027. With September at a degrowth of only 13.6%, these trends indicate a gradual improvement in the operating environment for commercial lines, which augurs well for the segment in coming quarters. As highlighted earlier, the Motor segment continued to record healthy growth. Notably, EV penetration across passenger vehicles and two-wheelers surged 1.5 times, rising from a 6.4% penetration to 9.7 with a combined 1.3 million vehicles sold during H1 of 2027. The industry registered a growth of 13.1% in motor insurance for H1 2027 vis-a-vis H1 2026. Moving into the festive season, we expect the motor sales to continue surpassing previous trends. However, growth may appear to be moderated on account of a higher base. Health continues to be a fa- fastest growing segment for general insurance industry. This segment reported a robust growth of 21% for H1 2027, with health insurance group health line of business growing by growing by 15.3%, while retail health recorded a healthy growth of 32% during the same period. As mentioned earlier, the recent G- GST Council recommendation to allow input tax credit on employer-sponsored group health is a welcome development. Improved affordability could encourage wider employee health coverage among SMEs and large corporates, supporting the segment's growth. Speaking on the underwriting performance of the industry, the underwriting performance of general insurance industry continued to remain under pressure, with the overall combined ratio deteriorating to 116.8% in Q1 FY 2027 from 115% in Q1 2026. Within this, the industry combined ratio for Motor segment deteriorated significantly to 131.4% in Q1 2027 from 125% in Q1 2026, driven by increase in both loss ratio and commission ratio, reflecting a continued pressure on underwriting profitability. Against this back- backdrop, ICICI Lombard's Motor combined ratio moved only marginally to 108.3% in Q1 2027 from 107.6% in Q1 2026, primarily attributable to the impact of Supreme Court judgment, as discussed during our previous earnings call. Consequently, the delta in combined ratio of Motor between the industry and the company widened significantly to 23.1% in point in Q1 2027 from 17.4% point in Q1 2026. This widening differential reinforces the strength of our underwriting discipline, pricing capabilities, and claims management practices, enabling us to sustain our leadership position while consistently delivering superior outcome related to the industry. I will now proceed to present our company's performance across key business segments for half year. The company reported a growth of 5.4% in GDPI for H1 2027 compared to the industry growth of 8.9%. Further, the GDPI growth of the company, excluding crop and mass health segment, was 13.9% for Q2 2027, as compared to industry growth of 13.2%. Within our commercial lines segment, Q2 2027 witnessed a significant improvement over the preceding quarter. Excluding Fire, our commercial line portfolio registered a healthy growth of 20% in Q2 2027 and 13.2% for H1 2027. With broad-based traction across lines of business, within Fire, the pace of decline moderated significantly, with degrowth reducing to 21.2% in Q2 from 32.1% in Q1 2027. Pertinently, the degrowth for the month of September 2026 moderated further to just 6%, reflecting a sequential improvement through the quarter. Our market share in Fire line of business for the period ended half year 2027 stood at 12.
Sanjeev Mantri (ICICI Lombard General Insurance Company Ltd): We have gained market share in Q2 vis-a-vis Q2 2026 in fire from 11.4 to 11.9%, in marine cargo from 17.1 to 19%, in engineering from 15.8 to 16.4%, and in liability from 16.1 to 16.6%. We maintained our leadership position in marine cargo and engineering line of business for H1. In the motor segment, we recorded a healthy growth of 13% for H1 2027 broadly in line with the industry growth of 13.1% for H1 2027, thereby maintaining our market leadership position with market share of 10.3% for H1 2027. We remain focused on strengthening our granular distribution across OEM dealerships and diversified retail channels. Our portfolio mix for private car, two-wheeler and commercial vehicle stood at 49.8%, 28.1% and 22.1% respectively for H1 2027. As indicated during our quarter 1 2027 earnings call, the company had made incremental provisions towards the motor third party reserves, following the Supreme Court judgment in the Shishupal case, in line with our prudent and conservative reserving philosophy. Given that the judgment was delivered towards the end of the quarter, the company had recognized the impact on entire portfolio for quarter 1 of 2027, resulting in an incremental reserving requirement. During Q2 of 2027, we have calibrated our business operations to factor in the implications of the judgment, and the same has now been fully integrated into our regular course of business. Looking ahead, we are well positioned to enhance our market position given the robust volume growth as reflected in VAHAN data, increased retention rate, and significant difference in our combined ratio versus that of the industry in motor insurance segment. In health segment, we recorded a healthy growth of 26.8% for H1 2027 as against the industry growth of 21% for 2027. Our retail health business continued to demonstrate strong growth of 66.4% for H1 2027, significantly outpacing the industry growth of 32%. Consequently, our market share improved to 4.7% for H1 2027 from 3.7% for the corresponding period last year. Pertinently, we exited September 2026 with a market share in retail health reaching 5% for the first time, reflecting the sustained strength of our retail health franchise. The group health segment recorded a growth of 15.4% for H1 2027 with market share remaining stable at 8.8% for H1 2027, in line with the corresponding period last year. On August 3rd, 2026, ICICI Lombard marked its Silver Jubilee, celebrating 25 years of operations. As we step into the next phase of our journey, we remain committed to driving innovation, strengthening our customer promise, and creating sustainable long-term value. We extend our heartfelt gratitude to all our stakeholders for their trust and support, which continue to inspire inspire our progress. To to commemorate the significant milestone, ICICI Lombard unveiled 25 innovative solutions across multiple lines of business, including offerings such as Complete Home Protect, Paw Care, Motor Service Assure and Power Booster plus amongst others. Notably, these comprise five industry first and seven industry leading solutions. Further, the company organized its Digital Day in the last week of September 2026, where we showcased how technology is closely integrated with our business operations and is helping us drive tangible outcomes across key areas, including product development, underwriting, claims management and customer service. I would like to thank all of you who took the time to participate in the event. On the same day, we also launched the latest health insurance offering, Vybe, for our Gen Z customers, designed to provide a comprehensive wellness solution that goes beyond traditional health insurance protection. The product reflects our continued innovation in making health insurance more relevant and accessible to the younger generation. AI and Agentic AI are enhancing claims accuracy, accelerating genuine claims, and strengthening fraud risk assessment with human oversight. Precision rates on leakage, fraud-related triggers have improved from 45% to 60% through usage of GenAI.
Sanjeev Mantri (ICICI Lombard General Insurance Company Ltd): journeys for customer service continued to grow with 73% of our total customer interactions being handled through digital, DIY journeys as against 39% last year. In health underwriting, our industry first WhatsApp-based GenAI bot helps customer complete their underwriting through a conventional interface, conversational interface, enabling a more comprehensive risk assessment and faster turnaround time. This journey now is used in over 40% of our agency business, new business. These initiatives, I have outlined, reflect our continued focus on leveraging technology and innovation to strengthen our business capabilities and drive sustainable, profitable growth. As articulated during our recent Digital Day, one of the key strategic priority is to scale up digital sourcing with a defined roadmap to elevate its contribution from the current 6% to 15%, thereby reinforcing our commitment to innovation and future ready distribution. I will now request Gopal to take us through the financial numbers of H1 2027.
Gopal Balachandran (ICICI Lombard General Insurance Company Ltd): Thanks Sanjeev, and good evening to each one of you. Before I proceed with giving a brief overview of the financial performance of the recently concluded quarter and half year, I would like to share herewith some aspects of some of the key initiatives as an organization. Our IL TakeCare app, a one-stop solution for insurance and wellness needs, achieved 23.3 million downloads as at September 30, 2026, reflecting growing digital adoption. A total number of health and travel claims serviced through the IL TakeCare app witnessed an uptick by 25.6% and reached 3,78,583 claims for H1 FY '27. Our Preferred Provider Network service 75.9% of our non-OEM claims for quarter two FY '27, vis-a-vis 75.1% for Q2 FY '26. In the health segment, 99.2% of our total claims were paid within 30 days for the half year FY '27. 93% of the customer surveyed as a part of our IL Sahayak initiative have rated their experience as exemplary, that is have given us a score of at least greater than or equal to 4.5 out of 5. Now, moving on to the financial performance. We have uploaded the results presentation on the exchanges. You can access it as we walk you through the performance number. All numbers mentioned below are on an N-basis, unless stated otherwise. Please refer our investor presentation on slide numbers 14 to 17, which has got details of outcomes on both N and 1/N for further details. Our combined ratio was 104.5% in Q2 FY '27, as against 103.9% in Q2 FY '26. Excluding the impact of CAT losses of 1.18 billion rupees in Q2 FY '27 and 0.73 billion in Q2 FY '26, the combined ratio was 102.7% and 102.6% respectively. Combined ratio was 105.2% for H1 FY '27, as against 103% for H1 FY '26. Excluding the impact of CAT losses of the same number, 1.18 in H1 and 0.73 in H1 of last year, the combined ratio was 104.2% and 102.3% respectively. Our investment assets during the quarter rose to rupees 643.32 billion as at September 30, 2026. This is up from rupees 605.79 billion as at June 30, 2026. Our investment leverage net of borrowings was 3.58x as at September 30, as against 3.59 as at June 30, 2026. On a quarterly basis, investment income was at rupees 15.54 billion in Q2 FY '27, as against rupees 12.49 billion in Q2 FY '26. Investment income for the current half year was 27.28 billion, as against rupees 25.38 billion in H1 last year. Capital gains stood at 4.53 billion in Q2 FY '27, as compared to 2.36 billion in Q2 FY '26. Our capital gains stood at rupees 6.37 billion in H1 FY '27, as compared to 6.16 billion in H1 FY '26. Our profit before tax grew by 27.8% at rupees 13.59 billion in Q2 FY '27, as against rupees 10.63 billion in Q2 FY '26, whereas PBT degrew by 5.8% and stood at rupees 19.21 billion H1 FY '27 as against rupees 20.39 billion in H1 FY '26. Consequently, PAT grew by 27.5% and stood at rupees 10.31 billion
Gopal Balachandran (ICICI Lombard General Insurance Company Ltd): million in H1 FY '27 as against Rs 15.43 billion in H1 FY '26. The ROE was, for the quarter 2 FY '27, was 23.7% as against 21.3% in Q2 FY '26. Return on average equity was 16.8% in the half-year FY '27 as against 20.7% in H1 FY '26. Solvency ratio was at 2.74x at September 30, 2026, as against 2.68x at June 30, 2026, continues to be higher than the regulatory minimum requirement of 1.5x. Solvency ratio was at 2.62x as at 31st March, 2026. The Board of Directors of the company has declared an interim dividend of Rs 7 per share for H1 FY '27 as against Rs 6.5 per share for H1 FY '26. As I conclude, I would like to reaffirm that we continue to stay focused on driving profitable growth and sustainable value creation while protecting the interest of our stakeholders and customers at all times. With this, we'll be happy to take questions from all of you. Thank you.
Moderator: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question, may press '*' and then '1' on the touchtone phone. If you wish to remove yourself from the question queue, you may press '*' and then '2'. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Your first question comes from the line of Nishant Chouhan with Kotak. Please go ahead.
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