ICICI Lombard hasbeen posted a 23.8 percent rise in March quarter profits at Rs 281.93 crore due to a reduction in underwriting losses as the private insurer’s premium income dropped both for the quarter and full financial year. The loss reduced about Rs 29.42 crore in Q4FY20 as compared to Rs 49.70 crore in the year-ago period. Premium income of this company for the quarter stood at Rs.3181 crore as against Rs.3485 crore in the same period last year mainly on account of loss of crop insurance business i.e. excluding crop insurance, GDPI rose by 2.9 percent to Rs 3,244 crore. Reduction was due to a conscious call to not write crop business and also due to pricing improvements in segments like fire insurance, said Bhargav Dasgupta, CEO, ICICI Lombard.
The company’s MTM investment losses at Rs.550 crore in the quarter mostly on account of financial market meltdown. The overall investment book at the end of the financial year 2019-20 stood at Rs.26300 crore as the company said. Lombard has subsequently made a provision of Rs.120 crore against diminution in the value of investments.
The general insures solvency ratio was 217 percent at FY20 as against the minimum regulatory requirement of about 150 percent, down from 224% at the end of FY19. The company isn’t planning on raising any capital in near term even as it had ‘sufficient headroom’ to raise tier 2 capital when required what Dasgupta told reporters at the earnings call. It is also told by Dashgupta that “We are operating in unprecedented times with pandemic spreading across the world and impacting economies and lives . Over these weeks we have had to rearrange our processes – from claim settlement to channel operators” adding that the pandemic would likely bring disruptions in the in the businesses of all general insurer in the ongoing quarter.
He became stopped short of giving an assessment on the extent of losses expected given the uncertain nature of the pandemic. “It will require a brave person to predict that (losses to industry), given how things are changing every second day,”as the words given by Dasgupta.