ICICI Lombard FY2026: Q4 momentum, health-led mix shift, and steady profitability

ICICI Lombard closed FY2026 with a clear pickup in growth and better underwriting in the final quarter, even as the full-year premium expansion remained below the broader industry. For the year ended March 31, 2026, the company reported Gross Direct Premium Income of 287.12 billion on a 1 slash n basis, up 7.0% year on year, versus the industry’s 9.2% growth. The gap narrowed meaningfully in Q4, when GDPI rose 18.2% to 73.40 billion, ahead of the industry’s 10.9% growth in the same quarter.

Profitability improved in FY2026. Profit before tax increased 10.2% to 36.59 billion and profit after tax rose 10.5% to 27.72 billion on a 1 slash n basis. The combined ratio was 103.4% for FY2026, slightly higher than 102.8% in FY2025, but the Q4 underwriting outcome strengthened, with Q4 combined ratio improving to 101.2% from 102.5% a year ago. Management also highlighted a wage code impact of 0.55 billion on FY2026 profitability and ratios.

Growth was uneven, but the mix kept shifting toward health

ICICI Lombard’s product mix continued to balance Motor, Health, and Commercial Lines, with a visible tilt toward health. Based on GDPI mix for FY2026, Health, Travel and Personal Accident rose to 32% of the portfolio, while Motor OD and Motor TP were 20% each, Fire was 12%, and Crop reduced to 2%.

Health was the clear growth engine. FY2026 health GDPI increased 18.3% to 90.77 billion. Retail health accelerated, with the Individual line up 54.0% for the year and up 65.0% in Q4. Management attributed part of the retail momentum to GST reforms expanding the base of new customers, and disclosed retail health market share improving to 4.1% from 3.3% in FY2025.

Motor performance was steadier across the year, but improved sharply in the second half. Motor GDPI rose 7.6% to 115.52 billion in FY2026, versus industry growth of 9.2%. The company pointed out a clear inflection: H1 growth was 2.2%, H2 improved to 12.0%, and Q4 growth reached 15.0%, above the industry’s 10.0% in Q4.

Commercial lines remained the soft spot. The P and C portfolio grew 5.4% to 73.70 billion in FY2026, well below industry growth of 12.2%. Management was explicit that competitive intensity and pricing pressure, particularly in Fire during the second half, weighed on growth. It also noted that renewals from April 1, 2026 were being reported at discounts, suggesting the pressure could continue in Q1 FY2027.

Crop became a smaller part of the book. Crop premium reduced to 7.14 billion in FY2026 from 14.25 billion in FY2025, and the loss ratio worsened to 95.2% from 89.2%. The company said the degrowth reflected re-tendering and reduced coverage in some states.

Financial summary (as reported)

Note: With effect from October 1, 2024, long-term products are accounted on a 1 slash n basis as mandated by IRDAI.

Underwriting and service metrics stayed central to the narrative

The investor presentation and management commentary repeatedly emphasised disciplined underwriting, reserving prudence, and service quality as strategic anchors. The company highlighted a Risk Committee framework for risks that could impact solvency by more than 15 basis points, and noted a conservative reserving philosophy with explicit margins for adverse deviation. Reserving triangle disclosures showed favourable redundancies in multiple accident years for total and for motor TP excluding the erstwhile pool, consistent with the company’s messaging on reserving discipline.

On customer service, ICICI Lombard reported high levels of digitisation and improving experience metrics. In FY2026, 99.6% of policies were issued electronically. Claims turnaround remained a key differentiator: 96.8% of motor own damage claims and 98.8% of retail health claims were paid within 30 days in FY2026. The company also disclosed NPS improvements at the call centre, rising to 74 in Q4 FY2026 from 60 in Q1 FY2026, and said that in March 2026, 69% of service engagements were executed digitally.

These outcomes tie into a broader strategy of using technology to lower friction and improve retention. The presentation noted around a 4.8% improvement in retentions in FY2026 versus FY2025, supported by digital and AI capabilities.

Investment performance was steady, but mark to market was a headwind

The investment portfolio grew to 584.21 billion as of March 31, 2026, up 9.2% year on year. Realised returns were stable at 8.47% in FY2026 versus 8.42% in FY2025. Investment income increased to 47.42 billion in FY2026 from 42.50 billion in FY2025.

However, the company disclosed unrealised losses of 10.08 billion as of March 31, 2026, including 7.74 billion from the equity portfolio. The CFO also noted an impairment of 0.49 billion on equity investments in Q4 FY2026. This market movement had a visible impact on solvency, with management stating a 14 basis point impact from mark to market losses on the equity portfolio. Despite this, solvency remained strong at 2.67x, well above the regulatory minimum of 1.50x.

Capital allocation and shareholder returns

The board proposed a final dividend of 7.00 per share for FY2026, taking the total dividend for the year to 13.50 per share, higher than 12.50 per share in FY2025. The presentation also showed continued improvement in book value per share to 337.94 and basic EPS to 55.74 for FY2026.

What management flagged as the next set of themes

Two forward looking threads stood out. First, management expects the commercial lines pricing pressure, particularly in Fire, to remain a near-term factor, noting that April 1, 2026 renewals were being reported at discounts and implying the trend may carry into Q1 FY2027.

Second, regulatory change is becoming a meaningful execution item. IRDAI has mandated Ind AS reporting effective April 1, 2026, and management said it intends to seek forbearance for the first year so the transition is operationally robust. The call also referenced the Public Insurance Registry as a developing digital public infrastructure initiative that could, over time, improve industry penetration, efficiencies, customer service and risk selection.

Takeaways

FY2026 for ICICI Lombard was defined by a strong Q4 recovery in premium growth, stable profit expansion, and improving quarterly underwriting. The company’s strategic push toward retail health and digital servicing showed measurable traction through growth, market share movement, and operating metrics. At the same time, commercial lines faced visible pricing pressure and the investment book carried meaningful unrealised mark to market losses, which briefly weighed on solvency optics. With a high solvency buffer and steady dividend payout, the company enters FY2027 with clear priorities: protect underwriting discipline in a competitive pricing environment and execute a smooth transition to Ind AS reporting.