ICICI Lombard Q3 Review — Strong Beat In Profitability, Premium Growth Inline; Motilal Oswal Maintains 'Buy'

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Motilal Oswal Report

ICICI Lombard General Insurance Company Ltd.’s gross domestic premium income was flat YoY in Q3 FY25 at Rs 65 billion (inline), impacted by 1/n regulation implementation for long term products. Sans the impact of the regulation, GDPI would have grown 4.8% YoY. Net earned premium grew 17% YoY to Rs 51 billion (in line). For 9M FY25, NEP grew 17% YoY to Rs 146 billion.

The claims ratio was significantly lower than our estimate at 65.8% (versus 70% in Q3 FY24). On a sequential basis, the commission ratio increased ~540 bp to 22.9% (our estimate: 17%). The expense ratio declined to 14% from 15.6% in Q2 FY25 (estimate: 16%).

A lower-than-expected loss ratio led to a beat in the combined ratio at 102.7% (estimate: 104.7%) compared to 103.6% in Q3 FY24.

PAT grew 68% YoY to Rs 7.2 billion (14% beat). For 9MFY25, PAT grew 43% YoY to Rs 20 billion.

While growth in the commercial and auto segments remained weak on the back of a weak economic backdrop, the health segment continued to do well for ICICI Lombard. Even in the motor segment, the company continued to gain market share.

We have raised our FY25/FY26 earnings estimates by 7% each on the back of better-than-expected performance in Q3 FY25. Reiterate Buy with a target price of Rs 2,300 (based on 35 times Sep’26E earnings per share).

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