Net profit dips by 2% due to rise in expenses

ICICI Lombard General Insurance reported a 2.25 per cent decline in net profit to Rs 577.25 crore for the July-September quarter of FY24, down from Rs 590.53 crore in the corresponding period last year. The dip was attributed to a rise in overall expenses, which offset robust growth in Gross Direct Premium Income (GDPI).

Overall expenses for the insurer surged by 11.62 per cent to Rs 4452.02 crore in the quarter under review, up from Rs 3988.82 crore in the same quarter of FY23. The increase was primarily due to a rise in commissions and brokerage costs.

However, GDPI saw an increase of 17.40 per cent to Rs 6086 crore, up from Rs 5185 crore, supported by growth across various segments. The health segment was particularly strong, thanks in part to a robust distribution network.

“The health segment continues to be the fastest-growing for the industry. During this quarter, we grew at 20.3 per cent. Owing to our sustained investment in retail health distribution, we have grown in line with the industry at 18.7 per cent,” said Bhargav Dasgupta, Managing Director and Chief Executive Officer of ICICI Lombard General Insurance, during a post-earnings analyst meet.

For Q2FY24, the retail health agency vertical expanded by 21.7 per cent, while the motor segment grew by 10.9 per cent, compared to the industry’s overall growth of 13.9 per cent in the July-September quarter.

Gross Premium Written (GWP) for the company climbed by 18.29 per cent to Rs 6272.3 crore, compared to Rs 5302.6 crore in the same quarter of the previous financial year.

The underwriting loss narrowed to Rs 146 crore, down from Rs 152.3 crore in Q2FY23. The combined ratio improved, falling to 103.90 per cent from 105.10 per cent. The company also declared an interim dividend of Rs 5 per equity share.