ICICI Lombard General Insurance Company Limited — Q3 FY26 earnings call

Call held 13 Jan 2026

Management summary

ICICI Lombard reported a mixed Q3 FY2026, with strong premium growth in Retail Health and a rebound in Motor, leading to improved market share. However, profitability metrics like PBT and ROE saw a decline on a 1/n basis, partly due to a one-time wage code impact and higher acquisition costs for new business. The company emphasized its focus on profitable growth, digital transformation, and maintaining a strong solvency position amidst evolving regulatory landscapes.

Highlights

  • Company GDPI grew 13.3% in Q3 FY2026, improving its market share from 8.1% to 8.3%.

  • Retail Health business delivered a robust growth of 85.8% in Q3 FY2026, significantly outperforming the industry growth of 33.6%.

  • Motor segment saw a rebound, growing 9.3% in Q3 FY2026, supported by strong growth of 16.1% in December 2025.

  • Call Centre NPS improved to 73 in Q3 FY2026 from 60 in Q1 FY2026, with over 60% of service engagements managed digitally.

  • Solvency ratio remained strong at 2.69x at December 31, 2025, well above the regulatory minimum of 1.50x.

Concerns

  • Combined ratio on 1/n basis worsened to 104.5% in Q3 FY2026 from 102.7% in Q3 FY2025.

  • PBT on 1/n basis de-grew by 9.4% to ₹8.70 billion for Q3 FY2026.

  • ROE on 1/n basis declined to 16.5% in Q3 FY2026 from 21.5% in Q3 FY2025.

Key financials

6 periods

Headline

  • Solvency Ratio (Dec 31, 2025)
    2.69×

Q3 FY2026

  • GDPI
    70.41 Bn
    YoY +13.3%

9M FY2026

  • GDPI
    213.72 Bn
    YoY +3.6%

1/n basis, 9M FY2026

  • ROE
    19.5%

n basis, 9M FY2026

  • Combined Ratio
    103.1%
  • PAT
    22.22 Bn
    YoY +13.8%

n basis, Q3 FY2026

  • Combined Ratio
    103.1%
  • PAT
    6.8 Bn
    YoY +0.1%

What they filed

Q1 FY27: revenue up 10.8%, net profit down 46.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue6,147 6,161 6,051 6,396 6,869 +12%6,905 +12%6,825 +13%7,088 +11%
EBITDA940 962 609 981 1,044 +11%854 −11%686 +13%522 −47%
Net profit694 724 510 747 820 +18%659 −9%547 +7%403 −46%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Motor
    33.99 Bn GDPI (Q3 FY2026)10.7% Market Share (9M FY2026)
  • Health
    20.44 Bn GDPI (Q3 FY2026)
  • Retail Health
    85.8% Growth (Q3 FY2026)4.5% Market Share (Q3 FY2026)63.1% Loss Ratio (Q3 FY2026)
  • Group Health
    26.6% Growth (Q3 FY2026)90.7% Loss Ratio (Q3 FY2026)
  • Commercial Line
    15.72 Bn GDPI (Q3 FY2026)
  • Engineering
    15.2% Growth (Q3 FY2026)

Capital allocation

high confidence
  • Liquidity Liquidity disclosed Solvency ratio at 2.69x at December 31, 2025, against 2.73x at September 30, 2025, continued to be higher than the minimum regulatory requirement of 1.50x.
    Solvency ratio was at 2.69x at December 31, 2025 as against 2.73x at September 30, 2025, continued to be higher than the minimum regulatory requirement of 1.50x.

Guidance & targets

Profitability

  • ROE Profitability · next year · High confidence 18-20%
    On Combined, more important than the combined, I think what we have largely spoken is to try and see if we can continue to sustain delivering ROEs in the range of 18% to 20%.

    — Gopal Balachandran

  • Corporate Health Loss Ratio Profitability · ongoing · High confidence mid-90s
    if you look at what we have been telling the market is on Corporate Health or Group Health, generally we have maintained that we are quite comfortable running at the book with the mid-90s.

    — Gopal Balachandran

  • Retail Health Loss Ratio Profitability · ongoing · High confidence 65-70%
    even Retail Health, the range that we have generally spoken to the market is to see if we are able to run the book at a range between 65% to 70%.

    — Gopal Balachandran

Market context

  • Company GDPI Growth vs Industry Growth · next year · High confidence 100-200 bps better
    what we have always maintained is at a top line or from a growth standpoint, we have tried to see if we can be 100 to 200 basis point at a Company level better than the industry growth numbers.

    — Gopal Balachandran

What to watch in Q4 FY26

Motor TP price announcement

next quarter
Current Industry waiting for announcement
Target Price announcement from regulator

Why it matters

Will impact pricing and profitability in the Motor Third-Party segment, a key area for the industry and the company.

So, Motor Third-Party, obviously, yes, I think as an industry, we all have been waiting for the price announcement. So, we will wait and see. By the time we announce results for the next quarter, hopefully we will see where we land. So, we will keep all of you updated on that.

Risks & concerns

  • Competitive intensity in Motor segment

    medium

    Despite GST rationalization and industry efforts, competitive intensity remains high, impacting premium growth and requiring disciplined underwriting.

    Analyst acknowledged

  • Worsening industry Combined Ratio

    medium

    Industry Combined Ratio worsened from 113.3% in H1 FY2025 to 119.2% in H1 FY2026, indicating continued underwriting pressure across the sector.

    Management acknowledged

  • Rising loss ratios in aging Health insurance book

    medium

    As the health insurance book ages, loss ratios tend to increase, but management expects this to be offset by reduced acquisition costs and improved medical solutioning.

    Analyst acknowledged

  • One-time financial impact from new labor codes

    low

    A one-time impact of ₹55 crore due to actuarial valuation for past service cost, with ₹17 crore unamortized cost to be amortized over 3 years.

    Management acknowledged

Q&A highlights

8 direct
Labor Code Impact: One-time vs. Recurring Direct
So far as the labor code is concerned, obviously the impact of ₹55 crore in that sense is one time because it is primarily the liability resulting from an actuarial valuation for the past service cost in so far as the wages is concerned. ... ₹17 crore of un-amortized cost is something that will get amortized over the next 3 years.

Clarifies the nature and magnitude of the one-time financial impact from new labor codes, distinguishing between immediate and amortized costs.

Asked by Supratim Datta

Motor Segment Growth and Competitive Intensity Direct
So the realignment was a very key piece, which is what we as an organization have done. Consequent to this, what we are seeing is the growth of December in particular where we have exceeded the market expectation. We remain very positively driven overall as to what Motor holds for us. We closed the year with a 10.7% market share...

Addresses concerns about slower Motor growth and competitive pressure, highlighting strategic realignment and market share retention despite industry challenges.

Asked by Supratim Datta

Motor TP Loss Ratio and Potential Reserve Release Direct
What we have told the market is overall Motor loss ratio range that we have spoken is between 65% to 67%, and if you look at the 9 month numbers and that is something that we keep urging that you should keep looking at year-to-date numbers than more quarterly outcomes. The 9 month numbers for the current year Motor overall stands at about 66.3%.

Provides clarity on the Motor loss ratio trajectory and confirms no specific reserve release is anticipated, aligning with previous guidance and focusing on year-to-date performance.

Asked by Supratim Datta

Retail Health Growth Drivers and Sustainability Direct
What we are very, very excited is more the underlying demand momentum than looking at numbers whether on an n basis or a 1/n basis. ... our market share increased to 4.5% in Q3, which clearly speaks about the underlying momentum that the team has been able to build.

Explains the strong Retail Health growth is driven by underlying demand, strategic initiatives, and market share gains, rather than just accounting effects.

Asked by Sanketh Godha

Health Segment Loss Ratios (Group Health and Retail Indemnity) Direct
On Group Health... Q3 current year was 90.7% and 9 month numbers is 93.2%. ... For Retail Indemnity... Q3 current year, Retail Indemnity loss ratios are 63.1% 9-month loss ratio numbers are 67.3%.

Provides specific loss ratio figures for key health segments, allowing for detailed performance assessment and comparison against management's target ranges.

Asked by Nidhesh

Managing Loss Ratios in an Aging Health Book Direct
As loss ratio picks up, which is very real and you are absolutely spot on, but at the same time the expense and the commission of acquisition also goes down. So, there is a counterplay that comes in on the aging book...

Addresses a structural concern in health insurance, outlining management's strategy to mitigate rising loss ratios through cost management, new customer acquisition, and actuarial modeling.

Asked by Nidhesh

Commission Increase and Regulatory Scrutiny Direct
Any Quarter 3 you go back, you will always find the cost of acquisition to be relatively higher than let's say what you would have seen for other quarter. So, there is obviously an element of seasonality that plays out when you look at the commission numbers on an isolated basis...

Explains the increase in commission as partly seasonal and linked to new business acquisition, while also addressing regulatory compliance on expense management.

Asked by Swarnabha Mukherjee

Input Tax Credit Loss due to GST Exemption in Health Direct
The benefit in totality of GST rationalization has got passed on to the customers, and we had the benefit of, as the volume grows for us, in every line of business, Motor or Health, economies of scale will kick in. ... Yes, shared with distributors.

Clarifies how the company is handling the financial impact of GST exemption on health insurance, indicating it's passed on to customers and shared with distributors, with volume growth offsetting some impact.

Asked by Nischint Chawathe

3 min read 8 chapters

Detailed narrative

Economic and Industry Overview

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.

Regulatory Reforms and Labor Codes

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.

Company Performance: GDPI and Market Share

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.

Segmental Performance: Motor, Health, Commercial

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.

Operational Efficiency and Digital Initiatives

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.

Financial Performance: Profitability and Solvency

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.

Health Segment Strategy and Growth Drivers

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.

Cost Structure and Regulatory Compliance

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.

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