Summary
ICICI Lombard General Insurance Company Limited - Q3 FY2026 Earnings Call Summary Tuesday, January 13, 2026, 6:00 PM IST
Event Participants
Executives 6 Anand Singhi (Chief – Retail and Government), Gaurav Arora (Chief – Reinsurance, Underwriting & Claims for P&C), Girish Nayak (Chief – Technology and Health Underwriting & Claims), Gopal Balachandran (CFO), Sandeep Goradia (Chief – Corporate Solutions, International & Bancassurance), Sanjeev Mantri (MD & CEO)
Analysts 5 Avinash Singh (Emkay Global), Nischint Chawathe (Kotak), Nidhesh (Investec), Prayesh Jain (Motilal Oswal), Sanketh Godha (Avendus Spark), Supratim Datta (Jefferies)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| GDPI (1/n basis) | ₹7,041 crores | +13.3% YoY; Outperformed industry growth of 11.5% for Q3. |
| Combined Ratio (1/n) | 104.5% | +180 bps YoY; Impacted by CAT losses (₹11 cr) and Wage Code impact (₹55 cr). |
| Combined Ratio (n) | 103.1% | +80 bps YoY; Management focuses on “n” basis for economic reality. |
| PAT (1/n basis) | ₹659 crores | -9.1% YoY; Impacted by one-time labor code provisions and accounting shifts. |
| PAT (n basis) | ₹680 crores | Flat YoY; Normalized for accounting changes, performance remains steady. |
| Solvency Ratio | 2.69x | Slightly down from 2.73x QoQ; remains well above regulatory 1.50x. |
| ROE (1/n basis) | 16.5% | -500 bps YoY; Lowered by one-time wage impacts and seasonality. |
| Investment Assets | ₹58,296 crores | +3.7% QoQ; Leverage net of borrowing stands at 3.60x. |
Geographic & Segment Commentary
- Motor: Registered 9.3% YoY growth in Q3 FY26, driven by an 18.8% surge in industry-wide new vehicle sales. Management noted a strategic shift as new vehicle growth (+12.4%) outpaced renewal growth (+7.7%) in the quarter. The segment’s combined ratio improved from 108.0% to 106.9% in H1 FY26, despite industry-wide pressure, reflecting disciplined risk selection.
- Health: Delivered robust GDPI growth of 40.6% in Q3, led by Retail Health which surged 85.8% YoY. Retail health market share expanded to 4.5% (from 3.2% YoY), fueled by the ‘Elevate’ product and GST rationalization benefits passed to customers. Group Health loss ratios improved significantly to 90.7% in Q3 from 97.2% YoY due to calibrated pricing and in-house claims management.
- Commercial Lines: Grew 7.4% in Q3, with Fire insurance specifically growing 18.8% driven by the SME segment (+27.4%). The company re-attained leadership in the Engineering segment with 15.2% growth in Q3. Portfolios in Marine Cargo and Liability underwent rationalization, leading to growth figures that lagged industry averages but protected margins.
Company-Specific & Strategic Commentary
- Digital Transformation: The “One IL One Call Centre” initiative now manages 60% of service engagements digitally (up from 38% in April 2025). AI bots contributed to an increase in Call Centre NPS to 73 in Q3 from 60 in Q1 FY26.
- IL TakeCare Ecosystem: The app crossed 19.7 million downloads, generating ₹354 crores in GWP for 9M FY26 (up 144% YoY). Digital adoption is high in travel insurance, where 93% of ‘TripSecure+’ service requests are now DIY.
- Regulatory Reform: Management highlighted the “Sabka Bima Sabki Raksha” Bill 2025, which allows 100% FDI and enables insurers to offer holistic risk management services beyond traditional underwriting.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| GDPI Growth | 100-200 bps above industry | FY27 target; based on distribution expansion and underlying auto/health demand. |
| ROE | 18% - 20% | Sustainable target range; assumes normalized CAT losses and steady investment yields. |
| Motor Loss Ratio | 65% - 67% | Expected range for combined OD and TP; contingent on pending TP rate hikes. |
| Health Loss Ratio | 65% - 70% (Retail) | Target range for Retail Indemnity as the book matures and acquisition costs amortize. |
Risks & Constraints
| Risk | Context |
|---|---|
| Competitive Intensity | Industry Motor Combined Ratio worsened to 128.5% in H1 FY26; ICICI Lombard is walking away from non-remunerative business. |
| Legislative/Wage Costs | One-time impact of ₹55 crores due to the Code on Social Security 2020; an additional ₹17 crores to be amortized over 3 years. |
| GST Rationalization | GST exemption on Retail Health requires cost structure realignment to manage loss of Input Tax Credit (Sanjeev Mantri). |
Q&A Highlights
Retail Health Growth Sustainability
- Question: What drove the 85.8% growth in Retail Health and is it sustainable? (Sanketh Godha)
- Answer: Growth was driven by the ‘Elevate’ product launch renewals, 1.7x growth in first-time buyers, and agency channel expansion. While 80%+ growth is extraordinary due to base effects, the underlying demand remains strong across all months (Sanjeev Mantri).
Motor Segment Pricing
- Question: Why is premium growth lagging volume growth despite premiumization? (Prayesh Jain)
- Answer: Premium growth was impacted by GST rationalization (28% to 18% on vehicles) reducing yield per vehicle. The company is maintaining leadership while staying disciplined on ROE targets amid industry combined ratios rising to 128% (Sanjeev Mantri).
Accounting Shifts (n vs 1/n)
- Question: How should we interpret the commission and combined ratio spikes? (Avinash Singh)
- Answer: Management urges focusing on “n” basis for economic value. Long-term health products are now accounted for on a 1/n basis, which creates a temporary mismatch between high upfront acquisition costs (commissions) and deferred premium recognition (Gopal Balachandran).
Key Takeaway
ICICI Lombard delivered a resilient Q3 FY2026, characterized by high-octane growth in Retail Health (+85.8% YoY) and a rebound in Motor GDPI (+9.3% YoY) following an industry-wide surge in vehicle sales. While reported PAT was pressured by a one-time ₹55 crore labor code provision and the transition to 1/n accounting for long-term products, the company maintained a healthy solvency of 2.69x and an “n-basis” combined ratio of 103.1%. Strategic focus remains on digital-first DIY servicing (60% digital engagements) and premiumizing the health portfolio with higher sum-insured products. Management retained its long-term ROE guidance of 18-20%, signaling confidence in navigating competitive intensity in Motor and the GST rationalization in Health through scale and technological efficiency. Forward-looking momentum is expected to stay 100-200 bps above industry growth.
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