(Reuters) -India’s ICICI Lombard General Insurance reported a rise in second-quarter profit on Tuesday, driven by strong demand for retail health insurance and a rebound in vehicle sales that strengthened its motor insurance segment.
The non-life insurer’s profit after tax jumped 18% to 8.2 billion rupees ($92.37 million) for the quarter ended September 30.
Demand for health insurance has surged in India in recent years amid soaring medical costs and heightened awareness, particularly after the COVID-19 pandemic.
Premiums from ICICI Lombard’s retail health insurance segment surged 50% over the year earlier, while the corporate segment reported an around 14% growth.
Analysts at Motilal Oswal attributed the gains in the retail health insurance segment to strong new customer acquisition, suggesting the company has expanded its market share in the category.
Premiums in the motor segment rose about 10% to 27.3 billion rupees, as tax cuts fuelled auto demand towards the end of the quarter after a sluggish few months.
Analysts, however, said the changes to premium recognition rules introduced last October are slowing reported premium growth. Under the new rules, premiums for long-term policies must be spread out over the entire policy period, rather than being recorded all at once.
ICICI Lombard’s net premiums earned rose 12% to 56.52 billion rupees in the second quarter. Its gross direct premium income dropped 1.9%, hurt by the accounting change.
The company’s combined ratio, a key measure of underwriting profitability, deteriorated to 105.1% from 104.5% a year earlier. A ratio below 100% signals the insurer is earning more in premiums than it is spending on claims and expenses.
ICICI Lombard is backed by ICICI Bank, one of India’s largest private lenders. It offers marine, crop and travel insurance, in addition to motor and health cover.
($1 = 88.7740 Indian rupees)
(Reporting by Nishit Navin; Editing by Shilpi Majumdar)
