ICICI Lombard General Insurance Company Limited — Q4 FY26 earnings call

Call held 20 Apr 2026

Management summary

ICICI Lombard reported strong Q4 and FY26 performance, driven by robust growth in the Health and Motor segments, particularly in the second half of the year. Profitability metrics showed healthy growth, and the solvency ratio remained strong. However, the Commercial lines segment faced competitive pressures, and the company noted an impairment on equity investments due to market volatility. The company is actively focusing on digital transformation and preparing for the transition to Ind AS.

Highlights

  • Gross Direct Premium Income (GDPI) for Q4 FY26 grew 18.2% against an industry growth of 10.9%.

  • The Health segment grew 20.0% for FY26, significantly outpacing the industry growth of 15.4%.

  • Retail Health business demonstrated strong growth of 51.1% for FY26, improving market share from 3.3% to 4.1%.

  • Profit After Tax (PAT) on an 'n' basis grew 14.1% to ₹27.61 billion for FY26.

  • Solvency ratio stood at a healthy 2.67x at March 31, 2026, exceeding the minimum regulatory requirement.

Concerns

  • Commercial lines segment growth was muted at 5.4% for FY26, lagging the industry growth of 12.2% due to competitive intensity and pricing pressure.

  • The industry Combined Ratio for Motor Line of Business remained elevated at 128.1% for 9M FY26.

  • Return on Average Equity (ROAE) for FY26 was 17.8%, a decline from 19.1% in FY25.

  • An impairment of ₹0.49 billion on equity investments was recognized in Q4 FY26 due to market correction.

Key financials

4 periods

Headline

  • Solvency Ratio (Mar 31, 2026)
    2.67×

Q4 FY26

  • GDPI Growth
    18.2%

FY26

  • GDPI Growth
    7%
  • PBT
    36.59 Bn
    YoY +10.2%
  • ROAE
    17.8%

FY26, n basis

  • Combined Ratio
    102.4%
  • PAT
    27.61 Bn
    YoY +14.1%

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

  • Commercial Lines
    5.4% Growth (FY26)6.5% Growth (H1 FY26)3.8% Growth (H2 FY26)
  • Motor
    7.6% Growth (FY26)2.2% Growth (H1 FY26)12% Growth (H2 FY26)15% Growth (Q4 FY26)
  • Health
    20% Growth (FY26)38.2% Growth (Q4 FY26)
  • Retail Health
    51.1% Growth (FY26)4.1% Market Share (FY26)42.1% Long Term Premium in New Business
  • Group Health
    11% Growth (FY26)8.7% Market Share (FY26)

Capital allocation

high confidence
  • Dividend ₹7/share (final) Payout ratio 25%
    The Board of Directors of the Company has proposed a final dividend of ₹ 7.00 per share for FY2026. This payment is, however, subject to approval of shareholders in the ensuing Annual General Meeting of the Company. The overall dividend for FY2026, including the proposed final dividend is ₹ 13.50 per share. Last year, the overall dividend was ₹ 12.50 per share.
  • Liquidity Liquidity disclosed Solvency ratio was at 2.67x at March 31, 2026, against 2.69x as at December 31, 2025, which continued to be higher than the minimum regulatory requirement of 1.50x. The solvency was impacted by 14 basis points, as an outcome of the Mark to Market losses experienced on the equity portfolio as at March 31,2026.
    Solvency ratio was at 2.67x at March 31, 2026, as against 2.69x as at December 31, 2025, which continued to be higher than the minimum regulatory requirement of 1.50x. The solvency was impacted by 14 basis points, as an outcome of the Mark to Market losses experienced on the equity portfolio as at March 31,2026.

Guidance & targets

Profitability

  • Combined Ratio (post IFRS adoption) Profitability · Year of adoption (FY27) · High confidence 300-450 basis point decline
    So, also, just to close out the IFRS part, we have always said in the past also, that the year of adoption, there would be a significant decline in combined ratio. It can be in the range of 300 basis to maybe 400-450 basis point.

    — Sanjeev Mantri

Dividend

  • Overall Dividend Per Share (FY26) Dividend · FY26 · High confidence ₹13.50 per share

    From ₹12.50 per share (FY25) today

    The overall dividend for FY2026, including the proposed final dividend is ₹ 13.50 per share. Last year, the overall dividend was ₹ 12.50 per share.

    — Gopal Balachandran

Growth

  • Motor Industry Growth Growth · FY27 · Medium confidence higher single-digit growth
    We do expect a higher single-digit growth at the industry level. And if that happens, it would be, again, good for us.

    — Sanjeev Mantri

What to watch in Q1 FY27

IFRS Impact on Combined Ratio and ROE

Next quarter (FY27 Q1 onwards)
Current Combined Ratio (n basis) 102.4% for FY26, ROAE 17.8% for FY26 (IGAAP)
Target Expected 300-450 bps decline in combined ratio post IFRS adoption; impact on ROE.

Why it matters

The transition to Ind AS (IFRS) will significantly alter reported profitability metrics, requiring close monitoring of actual impact versus management's guidance.

So, also, just to close out the IFRS part, we have always said in the past also, that the year of adoption, there would be a significant decline in combined ratio. It can be in the range of 300 basis to maybe 400-450 basis point. But look, that's only the accounting part of it. The economic value over a period of time, it is expected to converge and have the same value creation for the Company as it happens.

Risks & concerns

  • IFRS Transition Impact on Reported Metrics

    high

    IFRS adoption is expected to cause a significant decline of 300-450 basis points in the combined ratio, though the economic value remains the same.

    So, also, just to close out the IFRS part, we have always said in the past also, that the year of adoption, there would be a significant decline in combined ratio. It can be in the range of 300 basis to maybe 400-450 basis point.

    Management acknowledged

  • Geopolitical Instability

    medium

    Ongoing conflict in West Asia has heightened global economic uncertainty, leading to volatility in energy prices and financial markets, with potential spillover effects on the Indian economy.

    The ongoing conflict in West Asia has heightened global economic uncertainty, leading to volatility in energy prices and financial markets. These external risks could have some spill over effects on the Indian economy, warranting a measured and watchful approach.

    Management acknowledged

  • Competitive Pressure in Commercial Lines

    medium

    The Commercial segment experienced elevated competitive intensity and pricing pressure, especially in the Fire segment, leading to muted growth.

    As one can observe, the business witnessed elevated levels of competitive intensity & pricing pressure especially in the Fire segment in the second half of the year, leading to muted growth.

    Management acknowledged

  • Elevated Motor Combined Ratio for Industry

    medium

    The Combined Ratio for the Motor Line of Business continues to remain elevated at 128.1% for 9M FY2026 due to pricing pressure.

    Due to pricing pressure, Combined Ratio for the Motor Line of Business continues to remain elevated at 128.1% for 9M FY2026 vis-à-vis 123.8% for the period ended 9M FY2025.

    Management acknowledged

  • Equity Market Volatility

    low

    An impairment of ₹0.49 billion was recognized on equity investments in Q4 FY26 due to prevailing market correction.

    During the quarter under review, the Company has recognized an impairment on its equity investments of ₹0.49 billion in Q4 FY2026 vs - 0.03 billion in FY2025, driven by the prevailing market correction.

    Management acknowledged

Q&A highlights

7 direct
Competitive environment and Motor TP loss ratio Direct
I think the range that we are comfortable on Motor is between 65% to 67%. I think that is the range that we have maintained. And if you would have seen for the full year current year, I think we ended at roughly about 66.3%.

Management clarified their comfort range for Motor loss ratio and explained the conservative approach to crop loss provisioning.

Asked by Supratim Datta

IFRS impact on PAT and Combined Ratio Direct
So, also, just to close out the IFRS part, we have always said in the past also, that the year of adoption, there would be a significant decline in combined ratio. It can be in the range of 300 basis to maybe 400-450 basis point.

Management provided a quantitative estimate of the impact of IFRS adoption on the combined ratio, clarifying it's an accounting change not affecting economic value.

Asked by Supratim Datta

Solvency utilization for dividends vs. growth Direct
On an average, I think what we have been able to distribute is roughly about 25% of our PAT. And this year, again, as what we had put out in our opening transcript, roughly about ₹ 13.5 per share for the full year, roughly translates to almost about 25% of our profit after tax.

Management explained their dividend distribution policy and confirmed their commitment to using capital for growth while maintaining regulatory solvency.

Asked by Prayesh Jain

Health loss ratios breakup (Retail vs Group) Direct
On the retail indemnity book, the loss ratio for Q4 last year was 64.8%. And this year, Quarter 4, the loss ratio on the indemnity book is at 57.6%. Now, the same year numbers on a full year basis, employer-employee book for last year has been at 97.2%. And this year, full year, the employer-employee book loss ratio stands at about 91.9%.

Detailed breakdown of loss ratios for different health segments provided clarity on underwriting performance.

Asked by Prayesh Jain

Commercial Lines market share and FY27 growth outlook Partial
But the Commercial practice that we have is very unique in the industry. And it's not driven by what business we are able to write, it's about how we are able to even manage teams. There's a significant contribution on large corporates to mid and to small.

Analyst questioned market share loss in Commercial Lines and future growth. Management emphasized their differentiated approach and selective growth strategy.

Asked by Sanket Godha

Motor segment H2 growth drivers and FY27 outlook Direct
And we have seen that new grew at almost 18.8% for us vis-à-vis 13.4% on the old side. So, on the outlook of Financial Year '27, we will have to see. We do expect a higher single-digit growth at the industry level.

Management attributed H2 Motor growth to new vehicle sales and improving retentions, providing an outlook for industry growth in FY27.

Asked by Nidhesh

CV segment growth strategy Direct
We have also created a significant edge vis-à-vis the market through a fleet management system, which we are working for last almost 18 to 24 months. And that has also started giving us some bit of an advantage as to what we can do in Commercial Vehicle.

Management explained the strategic initiatives, like a fleet management system, driving improved performance in the Commercial Vehicle segment.

Asked by Avinash Singh

Regulatory guidelines on commissions (EOM) Direct
Any tightening on a uniform basis across the industry would place ICICI Lombard at a significant advantage because we have remained within the limits of expense of management and if others fall in place, we can only see better time ahead for us as an industry.

Management views potential regulatory tightening on commissions as a positive for compliant players like ICICI Lombard, creating a more level playing field.

Asked by Nischint Chawathe

3 min read 6 chapters

Detailed narrative

Q4 & FY2026 Performance Overview

ICICI Lombard reported a Gross Direct Premium Income (GDPI) growth of 7.0% for FY2026, compared to the industry growth of 9.2%. However, the company demonstrated strong momentum in the latter half of the year, achieving 18.2% growth in Q4 FY2026 and 15.7% in H2 FY2026, significantly outpacing the industry's 10.9% and 11.2% growth respectively for the same periods. Excluding Crop and Mass Health segments, the company's GDPI growth stood at 10.2% for FY2026.

Segmental Performance: Health, Motor, and Commercial Lines

The Health segment was a key growth driver, expanding by 20.0% for FY2026 against an industry growth of 15.4%, with Q4 FY2026 growth at a robust 38.2%. Retail Health, in particular, grew 51.1% for FY2026, increasing its market share from 3.3% to 4.1%. The Motor segment grew 7.6% for FY2026, with H2 FY2026 growth of 12.0% exceeding the industry's 10.5%. In contrast, the Commercial lines segment saw muted growth of 5.4% for FY2026, lagging the industry's 12.2% due to competitive intensity and pricing pressure, especially in the Fire segment.

Underwriting Performance and Combined Ratio

The company's Combined Ratio (CoR) on an 'n' basis for FY2026 was 102.4%, a slight improvement from 102.6% in FY2025. On a 1/n basis, the CoR for FY2026 was 103.4%. Excluding the impact of the wage code, the FY2026 CoR stood at 102.1% ('n' basis) and 103.1% ('1/n' basis). For Q4 FY2026, the CoR on an 'n' basis was 100.5%, down from 102.1% in Q4 FY2025. The industry's overall CoR deteriorated from 113.2% in 9M FY2025 to 119.3% in 9M FY2026, with Motor CoR remaining elevated at 128.1%.

Profitability and Solvency

Profit Before Tax (PBT) grew 10.2% to ₹36.59 billion for FY2026. Profit After Tax (PAT) on a 1/n basis increased 10.5% to ₹27.72 billion for FY2026, and on an 'n' basis, PAT grew 14.1% to ₹27.61 billion. Return on Average Equity (ROAE) was 17.8% for FY2026, compared to 19.1% in FY2025. The solvency ratio stood at a healthy 2.67x at March 31, 2026, well above the minimum regulatory requirement of 1.50x, though it was impacted by 14 basis points due to Mark to Market losses on the equity portfolio.

Key Initiatives and Digital Transformation

ICICI Lombard highlighted its 'One IL, One Team' philosophy and key initiatives. 'IL OneForce', an enterprise productivity platform, is used by over 10,000 sales employees and aims to be the single operating platform for all 15,000+ employees. The 'IL TakeCare' app achieved 21.0 million downloads by March 31, 2026, with gross written premium from the app reaching ₹5,170.7 million in FY2026. The 'One IL One Call Centre' initiative has led to 69% of service engagements being executed digitally in March 2026, improving Call Centre NPS to 74 in Q4 FY2026 from 60 in Q1 FY2026.

Regulatory Updates and Industry Outlook

The company acknowledged the IRDAI mandate for insurers to prepare financial statements under Ind AS from April 01, 2026, viewing it as a positive step for transparency. They plan to seek forbearance for the first year to ensure a calibrated transition. The Public Insurance Registry (PIR) was also highlighted as a key initiative expected to drive industry growth, penetration, and efficiency. Management noted that the industry's macroeconomic fundamentals are strong, providing comfort in absorbing external shocks, despite global uncertainties.

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