ICICI Lombard General Insurance Company Limited Q4 FY22 Earnings Conference Call Insights

Key highlights from ICICI Lombard General Insurance Company Limited (ICICIGI) Q4 FY22 Earnings Concall

Q&A Highlights:

• Shreya Shivani from CLSA asked about TP rate hike and how comfortable is ICICIGI with the kind of hike that the regulator has proposed. Bhargav Dasgupta MD replied that it’s different across different segments, but the long-term TP rate hike is a bit higher. Given the general inflation, ICICIGI would have liked to see slightly higher rate in certain categories. This will come around May.

• Shreya Shivani of CLSA also asked that given the underlying car sales is still weak, how much proportion of motor TP book is private cars. Gopal Balachandran CFO said that the split of OD and TP, which is roughly about INR40.68 billion is own damage and about INR42.12 billion is third party. Within that INR42.12 billion, private car third party will be about INR13.49 billion.

• Shreya Shivani with CLSA enquired about the fire loss ratios which has come down quite dramatically in 4Q22. Gopal Balachandran CFO said that on fire loss ratio’s share, a quarterly loss ratio may not necessarily be reflective of the underlying outcome of the performance. Looking at annual numbers would give a better perspective.

• Abhishek Saraf of Jefferies asked about the share of calamity losses going up in FY22. Bhargav Dasgupta MD said that for cyclone Tauktae it was up but otherwise the share of losses were significantly lower than ICICIGI’s normal market share.

• Madhukar Ladha of Elara Capital asked about the company’s expectation on the integration with Bharti and the expense ratios and its outlook. Bhargav Dasgupta MD replied it’s very difficult to put out a number. However, ICICIGI said it would want to continue to kind of stay invested in building some of its expansion plans.

• Prayesh Jain with Motilal Oswal enquired about the health claim ratios on the retail side, particularly on the group health. Gopal Balachandran CFO replied that the split of the corporate book (employer-employee portfolio) was 93.1% for 3Q and 95.3% in 4Q. And on the retail indemnity book, the loss ratio in 3Q was about 65.7% and 4Q was about 57.6%.

• Sanketh Godha from Spark Capital Advisors asked about price hike in motor OD, if it’s limited to new business or renewal premium too. Bhargav Dasgupta MD answered that it’s largely for new private cars.

• Neeraj Toshniwal from UBS Securities asked about the motor TP hike on the aggregate level. Bhargav Dasgupta MD answered that for 4Q22 it was roughly about 3%.

• Chetan Thakkar from ASK Investment asked that on the health side, how should one view combined over a longer term, both for group and retail put together. Bhargav Dasgupta MD said that it stays just a shade above 100%, between 100% to 105%. On the retail, ICICIGI said it’s investing and it will take about a couple of years to see that coming in line with the company’s numbers.

• Hitesh Gulati from Haitong Securities asked that out of the 88,000 agents, how many would be selling health for ICICIGI.  Gopal Balachandran CFO answered that the number of health agents within the 88,000 number will be about 6,000.

• Nidhesh Jain of Investec asked that in new private cars segment, has ICICIGI lost market share or gained market share in last one year. Bhargav Dasgupta MD said that in the nine months, the company lost market share. IN 4Q22, ICICIGI has not lost as much but lost a little bit in the private car side.