Sanjeev Mantri, MD & CEO, ICICI Lombard General Insurance
The company said the quarter’s combined ratio included the impact of two large fire losses amounting to Rs 63 crore, which added 1 percentage point to the ratio.
In addition, a recent Supreme Court judgement led the insurer to increase claim reserves for its Motor Third Party portfolio by Rs 165 crore, resulting in an additional 2.8 percentage point impact on the combined ratio.
Mumbai: ICICI Lombard General Insurance, India’s second-largest private general insurer, reported a sharp 46 per cent decline in net profit for the first quarter of FY2027 after being hit by two large fire claims and a one-time increase in reserves following a Supreme Court(SC) judgement on its Motor Third Party (TP) portfolio.
The insurer’s profit after tax (PAT) fell to Rs 403 crore in Q1 FY2027 from Rs 747 crore in the corresponding quarter of the previous financial year.
“Excluding the impact of the two large losses in the Fire segment and the judgement of the Supreme Court on the Motor TP portfolio, the company’s PAT declined by 23.0 per cent and stood at Rs 575 crore in Q1 FY2027,” ICICI Lombard said in a statement.
“The SC judgment provides for compensation under a distinct head loss of domestic care, based on monthly income of ₹30,000 with a periodic increase to reflect inflation and socio-economic changes. Keeping with our prudent and conservative reserving practices, the company has made an assessment of the impact of the judgment on Motor TP portfolio, and has made the requisite provisions in the financials of Q1FY27,” Sanjeev Mantri, MD & CEO, ICICI Lombard General Insurance Company, explained in the earnings call.
“Based on a preliminary assessment of the impact of this judgment, the motor TP loss ratio of the industry is expected to increase in the range of 12 to 15 percent,” Mantri added.
However, the insurer continued to report healthy premium growth. Gross Direct Premium Income (GDPI) rose 7.5 per cent to Rs 8,318 crore during the quarter from Rs 7,735 crore a year earlier.
Underwriting performance of the company weakened significantly during the reporting period.
The combined ratio, a key measure of underwriting profitability, deteriorated to 107.2 per cent in Q1 FY2027 from 102.9 per cent in the year-ago period, indicating higher claims and expenses relative to premium earned.
The company said the quarter’s combined ratio included the impact of two large fire losses amounting to Rs 63 crore, which added 1 percentage point to the ratio.
In addition, a recent Supreme Court judgement led the insurer to increase claim reserves for its Motor Third Party portfolio by Rs 165 crore, resulting in an additional 2.8 percentage point impact on the combined ratio.
Reflecting the deterioration in underwriting performance, underwriting losses more than doubled to Rs 629 crore during the quarter compared with Rs 293 crore in Q1 FY2026.
Investment income also moderated to Rs 1,174 crore from Rs 1,288 crore in the corresponding quarter last year, providing a smaller cushion against underwriting losses.
The insurer’s Health, including Personal Accident, business remained its largest portfolio during the reporting period.
Portfolio-wise, ICICI Lombard continued to report underwriting losses across most business segments. Only the Crop and Miscellaneous portfolios generated underwriting profits during the quarter. However, supported by investment income, the company remained profitable in the Fire, Retail Health, and Motor portfolios at the overall segment level.
Claims outgo rose sharply during the quarter, with total claims paid increasing 20 per cent year-on-year to Rs 3,511 crore, reflecting higher claim incidence and severity across key business lines.