ICICI Lombard

The Indian economy recorded a GDP growth of 8.2% in Q2 FY2026, supported by sustained government capital expenditure and a rebound in private consumption. High-frequency indicators like E-Way bills and toll collections showed 13% and 17% Y-o-Y growth respectively. The auto industry saw a significant uptick, growing 19.5% in Q3 FY2026, with private car sales up 19.3% and two-wheeler sales up 19.2%. Overall new vehicle sales for calendar year 2025 grew 7.7% to 28.1 million units.

The GST exemption on Retail Health insurance has significantly improved affordability and awareness, leading to increased policy uptake, particularly from tier 2 and tier 3 cities. Regulatory reforms, including the Sabka Bima Sabki Raksha Amendment of Insurance Laws Bill 2025, increased foreign investment to 100% and simplified investment provisions. New central labor codes, effective November 2025, introduced a one-time^📎 financial impact of ₹55 crore for past service costs, with an additional ₹17 crore to be amortized over three years.

ICICI Lombard's GDPI grew 3.6% for 9M FY2026 to ₹213.72 billion, compared to an industry growth of 8.7%. For Q3 FY2026, the company reported a premium growth of 13.3% to ₹70.41 billion, outperforming the industry's 11.5% growth. This led to an improvement in market share from 8.1% in Q3 FY2025 to 8.3% in Q3 FY2026. Excluding Crop and Mass Health, the company's GDPI grew 7.5% for 9M FY2026 and 16.4% for Q3 FY2026.

The Motor segment experienced a rebound, growing 9.3% in Q3 FY2026, supported by new vehicle sales buoyancy, and maintained a 10.7% market share for 9M FY2026. The Health segment grew 42.0% in Q3 FY2026, with Retail Health showing robust growth of 85.8%, significantly outperforming the industry. The company's Retail Health market share increased to 4.5% in Q3 FY2026. The Commercial line segment grew 7.4% in Q3 FY2026, with the Fire segment growing 18.8% driven by SME.

The 'One IL One Call Centre' initiative has driven digital adoption, with over 60% of service engagements managed digitally in December 2025, up from 38% in April 2025. This contributed to an improved Call Centre NPS of 73 in Q3 FY2026, from 60 in Q1 FY2026. The 'IL TakeCare' app has reached 19.7 million downloads, generating ₹3.54 billion in GWP for 9M FY2026. Motor claims efficiency was enhanced by expanding the cashless garage network to 15,000 in Q3 FY2026, with 75.2% of non-OEM claims serviced at PPN.

The company's Combined Ratio (n basis) for Q3 FY2026 was 103.1%, compared to 102.3% in Q3 FY2025. Excluding the one-time^📎 wage code impact, the Q3 FY2026 Combined Ratio (n basis) was 102.2%. Profit After Tax (n basis) for Q3 FY2026 was ₹6.80 billion, showing a marginal increase from ₹6.79 billion in Q3 FY2025. The Solvency Ratio remained strong at 2.69x as of December 31, 2025, well above the regulatory minimum of 1.50x.

Management highlighted that the strong Retail Health growth is driven by increased awareness, GST rationalization making it more affordable, and a significant increase in sum insured (bulk of customers in ₹7.5-10 lakh range). The company is focused on acquiring new-to-industry customers and retaining existing ones. While loss ratios may increase with an aging book, this is expected to be counteracted by reduced acquisition costs and improved medical solutioning, with actuarial modeling accounting for long-term portfolio behavior.

The company is realigning its cost structure to pass on the benefits of GST rationalization to customers and leverage economies of scale from volume growth. Management confirmed that the increased volume in Retail Health is not negatively impacting distributor income, and the input tax credit loss due to GST exemption is being managed. Investments in technology, such as bots for digital serving, are also helping to reduce cost per transaction and improve efficiency.