ICICI Lombard Q4 net profit shrinks nearly 10%, premium income climbs

ICICI Lombard General Insurance, which completed the merger of Bharti AXA’s general insurance with itself last year, reported a decline in net profit for the quarter ended March 31, 2022 over the year-ago period.

The company, one of the largest private-sector general insurers in the country, said its net profit in the fourth quarter shrank to Rs 312.5 crore for the three months ended March 31 from Rs 345.68 crore a year earlier.

This was despite a robust increase in both premium collection and income from investment activities even as expenses other than those associated with core insurance business rocketed.

Net premium income rose nearly 27% compared with the year-ago period to Rs 3,317.78 crore. Net income from investments rose 28% to Rs 538.37 crore in the fourth quarter.

The company’s share price rose 2.6% in a strong Mumbai market on Thursday. The company declared its numbers after trading halted for the day.

Other Key Highlights

1) Solvency ratio was 2.46x at March 31, 2022 as against 2.45x at December 31, 2021 and higher than the minimum regulatory requirement of 1.50x; Solvency ratio was 2.90x at March 31, 2021.

2) Return on Average Equity (ROAE) was 14% in Q4 FY2022 as against 18.8% in Q4 FY2021.

3) Gross Direct Premium Income of the company stood at Rs 4,666 crore in Q4 FY2022 as against Rs 3,478 crore in the year-ago period.

4) The combined ratio, one of the measures of profitability for an insurance company, rose to 103.2% during the quarter from 101.8% a year earlier.

5) The combined ratio for FY22 was, however, much higher at 108.8%, indicating a deterioration from the preceding quarters.

6) Motor insurance, the mainstay of the business, posted 19% rise in net premium income compared with the same period last year.

7) Health, fire and marine insurance units, although much smaller in size, saw much higher growth during the quarter as did crop insurance on a negligible base.

8) The firm’s board has proposed a final dividend of Rs 5 per share which, if approved, would take the overall dividend for FY2022 to Rs 9 per share.