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Health claims deterioration puts pressure on ICICI Lombard’s insurance margins

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Health claims deterioration puts pressure on ICICI Lombard’s insurance margins

Management intends to maintain the group health loss ratio in the mid-90s and the retail indemnity loss ratio at 65-70%. It also aims to keep the overall motor loss ratio at 65-67%.

ICICI Lombard’s combined ratio rose to 107% in Q2FY27 from 105.1% a year earlier, as the health claims ratio deteriorated by 800 basis points and commission costs increased. Net earned premiums grew 17% to Rs 6,650 crore, led by 48% growth in health insurance, while fire insurance premiums declined 30%. Net profit rose 15% to Rs 950 crore, beating estimates by 35% as investment income from policyholders’ and shareholders’ accounts exceeded estimates by 31% each. Sustained premium growth, health claims experience, proposed distribution reforms, motor third-party reserving and risk-based solvency requirements remain key monitorables.

ICICI Lombard General Insurance’s underwriting performance weakened in the September quarter as higher health claims and commission costs pushed its combined ratio to 107%. The pressure comes even as the insurer expects premium growth to sustain momentum in the second half of FY27, with health insurance remaining its biggest growth drive The insurer’s underwriting loss widened to Rs 320 crore in the second quarter of FY27 from Rs 180 crore a year earlier. The combined ratio rose from 105.1% to 107%, against the brokerage’s estimate of 104.8%. Excluding catastrophe losses of Rs 118 crore, the ratio stood at 105.3%, according to Motilal Oswal Financial Services. Advt

1%. 9%, but this improvement was insufficient to offset the pressure from claims and commissions. Higher catastrophe frequency contributed to the increase in the claims ratio, while commission costs rose with strong retail business growth.


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