ICICI Lombard Profit Drops 9% As Combined Ratio Worsens
Overview
ICICI Lombard General Insurance reported a 9% year-on-year decline in third-quarter net profit, settling at ₹659 crore. This downturn occurred as the company's combined ratio deteriorated to 104.5%, indicating increased claims and expenses relative to premiums earned, despite a 12.4% rise in total income.
Stocks Mentioned
ICICI Lombard Q3 Profit Declines Amid Worsening Combined Ratio
ICICI Lombard General Insurance Company Ltd announced a 9% year-on-year drop in net profit for the third quarter, with earnings falling to ₹659 crore from ₹724 crore in the same period last year. The results reflect increasing pressure on profitability within the general insurance sector.
Total income for the quarter showed resilience, climbing 12.4% to ₹6,610 crore. Net premium earned also saw a healthy increase of 12.7%, reaching ₹5,685 crore. These gains, however, were insufficient to offset rising costs and claims.
The company's combined ratio, a key metric indicating underwriting profitability, worsened significantly to 104.5%. This figure, up from 102.7% in the prior year's corresponding quarter, means the insurer spent more than ₹1 on claims and expenses for every ₹1 of premium earned. A ratio below 100% is generally considered favorable.
Market Reaction
Shares of ICICI Lombard General Insurance Company Ltd reacted negatively to the earnings announcement. The stock closed at ₹1,890.50 on January 13, down 1.04% or ₹19.80 on the BSE. Investors reacted to the decline in profitability and the concerning trend in the combined ratio.
