ICICI Lombard shares fall 4% as underwriting loss, multiple one-offs hit

Shares of ICICI Lombard General Insurance Company Ltd. fell as much as 4% in trade on Wednesday, January 14, despite a healthy topline performance, as weak underwriting and operating metrics weighed on investor sentiment.

The insurer reported around 13% growth in net earned premium, but operational performance deteriorated meaningfully.

Underwriting losses widened sharply, while operating profit declined by about 17%. As a result, profit after tax fell roughly 10%, even though investment income rose nearly 42%.

The combined ratio worsened to around 104.5% from about 102.7% earlier.

HSBC, which has a 'Buy' rating and a price target of ₹2,285 on the stock, said the Q3 profit miss came despite strong investment income and was driven by an increase in loss ratios along with a one-off impact from higher wage costs.

The brokerage has cut its FY26 earnings estimates and tweaked FY27-FY28 forecasts to account for the miss. Management reiterated its guidance of market share gains and return on equity of 18-20%, with execution seen as a key catalyst.

CLSA, which has a 'Hold' rating on ICICI Lombard with a price target of ₹1,980, said the Q3 performance was mixed.

The brokerage said that earnings were partly impacted by one-off labour code charges, even as underlying growth trends showed gradual improvement.

Retail health remained the standout segment, posting over 80% growth led by GST removal and strong traction for the Elevate product, while commercial lines delivered steady performance. Motor insurance growth improved as well, although competitive intensity continues to limit profitability.

Management told CNBC-TV18 that the company would welcome any decision by the insurance regulator IRDAI on regulating commissions.