Profit before tax for the quarter grew 7.5% to Rs 718 crore from Rs 668 crore a year ago. The combined ratio improved to 101.2% from 102.5% in Q4 FY25, reflecting better cost management and underwriting discipline, though it remained above the 100% breakeven level.
The balance sheet continued to remain strong, with a solvency ratio of 2.67x as of March 31, 2026, comfortably above the regulatory requirement of 1.50x. This was slightly lower than 2.69x as of December 31, 2025, mainly due to mark-to-market losses in the equity portfolio.
Gross direct premium income for the quarter increased 18.2% year-on-year, ahead of the industry growth rate of 10.9%, indicating ongoing market share gains.
ICICI Lombard has significantly outpaced the industry over the long term, albeit from a smaller base. Since its incorporation in FY2001, the company delivered a CAGR of 73.3%, compared with the industry’s 16.6%. Over FY2008 to FY2025, during the non-tariff era, its growth moderated as the company shifted focus towards profitability rather than aggressive expansion. Even so, its performance remained strong, with PAT CAGR at 20.7%, well ahead of the industry’s 9.4%.
Over the years, the general insurance landscape has evolved considerably, with the number of private insurers rising from just 4 to 34, and their market share expanding meaningfully. Industry growth trends have remained steady, though ICICI Lombard’s growth has been more measured in recent years due to its disciplined approach.
Between FY2008 and FY2026, industry GDPI recorded a CAGR of 14.5%, while ICICI Lombard posted a slightly lower CAGR of 12.8%. The board has recommended a final dividend of Rs 7 per equity share, translating to a 70% payout for FY26, subject to shareholder approval at the upcoming AGM. The dividend will be paid to eligible shareholders once approved.
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Morgan Stanley has retained its Equal Weight rating on ICICI Lombard with a target price of Rs 1,920. The brokerage said profit exceeded its estimates but fell short of consensus expectations due to weaker investment income. It observed that premium growth was strong in the retail health segment, while the motor segment saw mixed trends amid competitive pressures. The combined ratio improved on the back of better cost control, and motor segment growth outpaced the industry, supported by new vehicle sales. Morgan Stanley expects growth to remain competitive, with moderate premium growth assumptions going ahead.
HDFC Securities remains positive on ICICI Lombard and has maintained its Buy rating with a target price of Rs 2,210. The brokerage noted that both premium and profit growth came in ahead of estimates, supported by improved loss ratios. However, it pointed out that the company’s market share declined over FY26, despite a recent pickup in growth. HDFC Securities highlighted that retail health and motor segments are driving momentum, although the combined ratio is likely to stay elevated due to portfolio maturity. It added that the long-term outlook remains strong, backed by a robust franchise and easing competitive intensity.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)