ICICI Lombard Navigates Competitive Waters with Focus on Profitability and Digital Edge

ICICI Lombard General Insurance Company Limited recently unveiled its performance for the second quarter and first half of the financial year 2026, presenting a nuanced picture of growth amidst a dynamic market. While the company experienced a slight de-growth in its Gross Direct Premium Income (GDPI) compared to the broader industry, its strategic emphasis on profitability shone through with robust earnings growth. This period saw significant policy reforms, including GST adjustments for health and auto insurance, which are expected to reshape the industry landscape and consumer sentiment.

For H1 FY2026, ICICI Lombard reported a GDPI of ₹14,331 crore, marking a 0.5% de-growth against an industry growth of 7.3%. However, excluding crop and mass health segments, the company's GDPI grew by 3.5%. Profitability metrics were strong, with Profit Before Tax (PBT) increasing by 22.3% to ₹2,071 crore and Profit After Tax (PAT) rising by 22.9% to ₹1,567 crore. The combined ratio, an important indicator of underwriting performance, deteriorated slightly to 104.0% for H1 FY2026, up from 103.2% in the prior year, partly influenced by catastrophic events.

Segmental Performance and Strategic Shifts

The company's performance across its diverse product portfolio reflects a strategic approach to growth and risk management. The Retail Health segment emerged as a standout, demonstrating strong growth of 25.2% for H1 FY2026, significantly outpacing the industry's 9.3% growth. This performance was attributed to sustained investments, product innovation, and strengthened distribution capabilities, leading to an improved market share from 3.2% to 3.7%.

The Motor segment, a cornerstone of the business, grew by 2.2% for H1 FY2026. Despite facing intense competitive pressure and pricing challenges, the segment witnessed a sharp uptick in September 2025, driven by festive demand and moderation of vehicle prices following GST rate cuts. The company maintains a leadership position in this segment, with a market share of 10.4% in H1 FY2026. In contrast, the Group Health segment experienced a de-growth of 0.6%, primarily due to muted disbursements in unsecured and microfinance sectors.

Commercial lines, including Fire, Engineering, Marine Cargo, and Liability, collectively grew by 6.5% for H1 FY2026. The Fire segment, in particular, showed robust growth, increasing by 27.3% in Q2 FY2026 and 36.4% in September 2025. This growth was supported by wider distribution across agency, broking, and bancassurance channels, alongside a focus on increasing the profit pool mix.

Financial Summary (H1 FY2026)

Digital Transformation and Customer Centricity

ICICI Lombard continues to prioritize digital transformation and customer-centricity to drive operational excellence. The 'IL TakeCare' app has garnered over 18.4 million downloads, reflecting growing customer engagement and digital adoption. The company has also launched differentiated service desks in June 2025, providing tailored servicing for senior citizens and high product density customers, handling over 96,000 calls and generating 3,000 cross-sell opportunities. These initiatives underscore the company's commitment to best-in-class service and efficient claims processing, with 96.4% of Motor Own Damage and 99.6% of Retail Health claims paid within 30 days in H1 FY2026.

Outlook and Investor Confidence

Management expressed optimism about the future, anticipating sustained industry growth driven by supportive regulatory environments and pro-consumption policies. The recent GST reforms, particularly the exemption of GST from individual health insurance premiums and rationalization of rates in the automobile sector, are expected to significantly boost demand. The company aims to maintain its Return on Average Equity (ROAE) within the 18%-20% range, demonstrating a disciplined approach to capital allocation and value creation for stakeholders. The declaration of an interim dividend of ₹6.50 per share for H1 FY2026, up from ₹5.50 in H1 FY2025, further reinforces investor confidence in the company's financial health and future prospects.

ICICI Lombard's H1 FY2026 performance highlights its resilience and strategic agility. By focusing on profitable growth, leveraging digital capabilities, and maintaining a customer-first approach, the company is well-positioned to capitalize on emerging opportunities and navigate competitive challenges in the Indian general insurance market.