Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance

`As part of a highly competitive market, where change is being driven constantly by digital players like Fintechs and Insurtechs, we believe that continuous reimagination of its technology and business processes is critical to maintaining its leadership position, said Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance

Mumbai:

Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance, said the second largest general insurer in the country, aims to bring down its combined ratio by 200 bps by fiscal 2025.

The company had reported a combined ratio of 104.5% in fiscal 2023 in comparison to 108.8% in fiscal 2022.

“We continue to make investment in strengthening our distribution, digital capabilities and growing in retail health and corporate lines of business. Through our focus on growth levers such as innovation, digital advancements, launching new products, strengthening our distribution engine, rationalising cost, while scaling up our preferred lines of business, we aim to bring down its combined ratio by 200 bps by fiscal 2025,” said Dasgupta, in the company’s latest annual report-

Since the de-tariffication in 2008, the general insurance industry delivered 15-year GDPI CAGR of 15.5% whereas ICICI Lombard General delivered 13.1% GDPI CAGR during the same period. During the same period, while the industry profitability reduced, ICICI Lombard General Insurance delivered 20.7% PAT CAGR over the last 15 years, he added.

“During fiscal 2023, investment assets of the company rose to Rs 431.80 billion. Given our portfolio composition, the current higher interest rate regime augurs well for us; resultantly our overall return on portfolio stood at 7.5% in fiscal 2023,” he said.

Though the company has grown in preferred lines of business, with notable increases in commercial lines and health insurance, it has taken a more prudent approach due to competitive intensity in the motor insurance. Resultantly, during the fiscal 2023, the company issued 32.7 million policies reaching a GDPI of Rs 210.25 billion,” he wrote.

“Growth in the SME segment of 24.0% year-on-year was a key driver of the company’s robust growth in the commercial lines. Consequently, the company has gained market share in Engineering and Liability lines of business while maintaining market share in Fire,” he elaborated.

The company’s bancassurance and key relationship groups grew by 36.7%. Within this,ICICI Bank distribution grew by 27.1% and non-ICICI Bank distribution grew by 42.9%.

The company’s digital focus has enabled an increase in its digital revenues (including business sourced through IL TakeCare app) to Rs 10.95 billion, resulting digital revenues to contribute 5.2% of company’s overall GDPI for fiscal 2023.

“As part of a highly competitive market, where change is being driven constantly by digital players like Fintechs and Insurtechs, we believe that continuous reimagination of its technology and business processes is critical to maintaining its leadership position, said Dasgupta.

The migration of the on-prem data centre to the cloud in fiscal 2022 was the first step in this direction. This fiscal, ICICI Lombard has commenced on a holistic business transformation to keep pace with the evolving market demands. This extensive business overhaul aims to position the company as a trailblazer in the insurance industry, primed to tackle disruptive market forces head-on. To achieve this, the initiative focusses on three transformational pillars: Technology,
Process and People. Adapting to change, building resilience, and future readiness are central to the strategy underpinning each of these pillars, informed Dasgupta.

Artificial Intelligence (AI), Machine Learning (ML), and Internet of Things (IoT) are transforming underwriting,renewals, claims settlement, and risk management processes at the company.

It has leveraged technology-led innovations, from using telematics to analyse driving behaviour to assessing and integrating wearable data in health underwriting.

The general insurer has identified capital conservation as an essential pillar of its strategy. At the close of the fiscal year 2023, its solvency ratio stood at 2.51x.