BENGALURU (Reuters) – India’s ICICI Lombard General Insurance reported a surprise drop in fourth-quarter profit on Tuesday, hurt by a jump in claims paid.
The non-life insurer’s profit after tax fell 2% to 5.10 billion rupees ($59.5 million) for the quarter ended March 31. Analysts, on average, expected a profit of 5.92 billion rupees, as per data compiled by LSEG.
The company’s claims paid in the quarter rose 25.5% from a year ago to 35.10 billion rupees.
Its gross premiums rose 10% to 69.04 billion rupees, slower than the 17% rise in the year-ago quarter.
Analysts said a regulation change in October mandating insurers to spread long-term policy premiums over the entire policy duration, instead of accounting the entire amount upfront, has reduced the premiums reported in the quarter.
Premiums from the company’s retail health insurance segment grew about 30%, as demand remained strong on improved awareness and rising medical costs, while premiums from the motor segment rose 18%.
ICICI Lombard is backed by ICICI Bank <ICBK.NS>, one of India’s largest private lenders. It also offers marine and crop insurance, among other services.
Combined ratio, a key profitability metric for insurance firms, rose to 102.5% from 102.3% a year earlier. A ratio under 100% indicates the insurer is earning more through premiums than what it is paying as claims and other operating expenses.
Shares of the company ended 6% higher ahead of the results.
($1 = 85.6930 Indian rupees)
(Reporting by Nishit Navin; Editing by Sahal Muhammed)
