ICICI Lombard Q2 Results: How The Insurance Giant Grew Profits By 20% While The Industry Stalled

Published: Oct 4, 2025 13:00

Executive Summary: Steering Ahead in a Slow Lane

ICICI Lombard General Insurance (ICICIGI) has just rolled out its Q2 FY25 results, and the numbers tell a compelling story of resilience and outperformance. While the broader general insurance industry seemed to be tapping the brakes, ICICIGI hit the accelerator, posting a robust 20.2% YoY growth in Profit After Tax (PAT) to ₹6.94 billion. This performance wasn’t just a fluke; it was powered by significant market share gains in its core Motor and burgeoning Retail Health segments.

But the headline profit growth only scratches the surface. The real test for any insurer is its underwriting discipline, especially when faced with natural calamities. Despite taking a ₹0.94 billion hit from catastrophe (CAT) losses this quarter, the company’s underlying profitability improved. So, how did they manage to grow faster than the market while keeping risks in check? Let’s break down the engine room of ICICI Lombard’s performance.

Sales Performance: Leaving the Competition in the Dust 🏎️

In a quarter where the general insurance industry’s growth slowed to a mere 2.0%, ICICI Lombard’s Gross Direct Premium Income (GDPI) grew by a commendable 10.4%. The outperformance is even more stark for the first half of the financial year (H1 FY25).

Metric ICICI Lombard Growth Industry Growth
Q2 FY25 GDPI +10.4% +2.0%
H1 FY25 GDPI +15.5% +7.0%

This isn’t just broad-based growth; it’s a story of strategic focus and execution in key areas. The two main growth engines firing on all cylinders were:

  1. Motor Insurance: Grew by an impressive 16.1% in Q2, dwarfing the industry’s 6.2% growth. This led to a significant market share gain from 9.8% to 10.9% in the motor segment. The secret sauce? A massive 29-30% growth in their renewal book, signaling strong customer retention and effective use of their distribution channels.
  2. Retail Health: This segment was the star performer, rocketing up by 41.4% in Q2, more than double the industry’s 17.7% growth. The launch of their new product, ‘Elevate’, has clearly struck a chord with customers, boosting their retail health market share to 3.5%.

However, it wasn’t all smooth sailing. The Group Health segment saw growth moderate to just 1.0% due to intense competitive pricing. This highlights a key challenge for the company: balancing growth with profitability in a price-sensitive corporate segment.

The Litmus Test: Underwriting Profitability and Combined Ratio

For an insurance company, profit from writing policies (underwriting) is the holy grail. The key metric to watch here is the Combined Ratio, which measures total expenses (claims + costs) as a percentage of premiums. A ratio below 100% signifies an underwriting profit.

Combined Ratio Q2 FY2025 Q2 FY2024 Change (Higher is worse)
Reported 104.5% 103.9% +0.6%
Ex-CAT Loss 102.6% 102.8% -0.2% (Improvement)

At first glance, the combined ratio seems to have worsened slightly. However, the devil is in the details. The quarter was impacted by ₹0.94 billion in catastrophe losses (floods in various parts of India). When we strip out this impact, the underlying combined ratio actually improved to 102.6%. This subtle but crucial improvement shows that the company’s core underwriting and cost management are moving in the right direction.

Management confidently reiterated their guidance to bring the combined ratio down to 101.5% by Q4 FY25, signaling their belief in continued operational efficiencies.

Segment Deep Dive: A Look Under the Hood

Motor Segment: Stable and Steering True

Despite no regulatory hikes in Third-Party (TP) premium rates for three years, ICICI Lombard has managed its motor loss ratios commendably.

Health Segment: A Tale of Two Portfolios

The health segment presents a mixed picture, reflecting the company’s strategic pivots.

Earnings and Profitability: Firing on All Cylinders 💰

The strong top-line growth and stable underwriting performance translated directly into robust bottom-line results. Investment income also provided a healthy tailwind.

Profitability (₹ billion) Q2 FY2025 Q2 FY2024 Growth % H1 FY2025 H1 FY2024 Growth %
Profit Before Tax (PBT) 9.19 7.64 +20.3% 16.93 12.84 +31.9%
Profit After Tax (PAT) 6.94 5.77 +20.2% 12.74 9.68 +31.7%

The Return on Average Equity (ROAE) for H1 FY25 stood at an impressive 20.3%, a significant improvement from 18.0% in the previous year. This level of return, combined with strong growth, solidifies ICICI Lombard’s position as a high-quality stalwart in the financial services space. The company also rewarded shareholders by increasing its interim dividend to ₹5.50 per share from ₹5.00 last year.

Analyst’s View and Key Takeaways

ICICI Lombard’s Q2 performance is a textbook example of strong execution in a challenging environment. It has successfully navigated industry-wide slowdowns and competitive pressures by focusing on profitable segments.

Classification: Stalwart. As a market leader demonstrating consistent, profitable growth that outpaces the industry, and delivering a high ROAE, ICICI Lombard fits the bill perfectly.

Key Positives to Cheer:

Key Risks to Monitor:

Overall, ICICI Lombard’s quarter was impressive. It is not just growing; it is growing profitably and strategically. Investors will be keenly watching its ability to deliver on its combined ratio guidance, which remains the key catalyst for future earnings trajectory and valuation.