ICICI Lombard General Insurance Co. Ltd. has released its financial results for the second quarter ending in September 2023, highlighting a notable decline in net profit. These results provide insights into the company’s performance and financial health during that period.
PROFIT DIP: NET PROFIT AT RS 577.3 CRORE
ICICI Lombard General Insurance reported a net profit of Rs 577.3 crore for the July -September quarter of the financial year 2023-24.
This represents a 2.2 percent decline from the net profit of Rs 590.5 crore recorded in the same period in the previous year.
Q2 EARNINGS SEASON COMMENCEMENT
The second quarter earnings season commenced with several companies releasing their financial results on October 18.
ICICI LOMBARD’S PERFORMANCE METRICS
ICICI Lombard General Insurance observed a 2.25 percent decline in net profit for the July to September quarter of FY24.
The net profit dropped to Rs 577.25 crore from Rs 590.53 crore in the corresponding period of the previous year.
This decline in net profit was primarily attributed to a notable increase in overall expenses, which offset the company’s robust growth in Gross Direct Premium Income (GDPI).
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EXPENSE SURGE: IMPACT ON NET PROFIT
The insurer’s overall expenses experienced a significant surge, amounting to a total of Rs 4452.02 crore in the quarter under review.
This marked an increase of 11.62 percent from the expenses recorded in the same quarter of FY23, which stood at Rs 3988.82 crore.
The surge in expenses was primarily driven by higher commissions and brokerage costs incurred by the company.
GDPI GROWTH: A POSITIVE HIGHLIGHT
Despite the decline in net profit, ICICI Lombard recorded a noteworthy growth of 17.40 percent in Gross Direct Premium Income (GDPI).
GDPI increased to Rs 6086 crore, surpassing the previous year’s figure of Rs 5185 crore.
 This growth was facilitated by positive performance across various insurance segments.
The health insurance segment was a standout performer, thanks in part to the company’s robust distribution network.
KEY INSIGHTS FROM MANAGEMENT
 Bhargav Dasgupta, Managing Director and Chief Executive Officer of ICICI Lombard General Insurance, noted the remarkable growth in the health insurance segment.
He highlighted that the health segment continues to be the fastest growing within the insurance industry, with a growth rate of 20.3 percent during the quarter.
This growth was attributed to sustained investments in retail health distribution, enabling ICICI Lombard to align with industry growth at 18.7 percent.
SEGMENT WISE GROWTH
During Q2 FY24, ICICI Lombard’s retail health agency vertical expanded by 21.7 percent, demonstrating robust performance.
 The motor insurance segment also saw healthy growth, with a 10.9 percent increase, outpacing the industry’s overall growth rate of 13.9 percent in the July-September quarter.
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ROBUST GROSS PREMIUM WRITTEN (GWP)
 Gross Premium Written (GWP) for ICICI Lombard witnessed an impressive ascent of 18.29 percent.
 GWP reached Rs 6272.3 crore, a significant increase from the Rs 5302.6 crore recorded in the same quarter of the previous financial year.
Underwriting Performance and Dividend Announcement
 The underwriting loss for ICICI Lombard narrowed to Rs 146 crore, a reduction from the Rs 152.3 crore reported in Q2FY23.
 The combined ratio improved, falling to 103.90 percent from 105.10 percent, indicating better underwriting efficiency.
 In addition to its performance metrics, ICICI Lombard declared an interim dividend of Rs 5 per equity share.
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SUMMARY
ICICI Lombard General Insurance reported a decline in net profit for the second quarter of FY24 due to increased expenses.
Nevertheless, the company showcased strong growth in Gross Direct Premium Income (GDPI) across various segments, with a particularly robust performance in the health insurance sector.
The company’s underwriting performance improved, and it announced an interim dividend for its shareholders.