ICICI Lombard General Insurance Company Limited: history, ownership, mission, how it works & makes money

A Brief History of ICICI Lombard General Insurance Company Limited

ICICI Lombard General Insurance Company Limited was established in 2001 as a joint venture between ICICI Bank and the Canada-based Fairfax Financial Holdings Limited. The company commenced operations in 2002, offering a diverse range of general insurance products.

As of March 2023, ICICI Lombard held a market share of approximately 8.5% in the Indian general insurance sector, making it one of the leading companies in this space. By the end of the fiscal year 2022-2023, the company reported a Gross Written Premium (GWP) of around ₹183.2 billion, showcasing a growth of 12% year-on-year.

ICICI Lombard was listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in 2017. The Initial Public Offering (IPO) was highly successful, with the share price listed at ₹661 and closing on the first day at approximately ₹675.

Through strategic initiatives, ICICI Lombard has expanded its product portfolio, which includes health insurance, motor insurance, travel insurance, and more. The company has invested in technology and innovation to enhance customer experience, evidenced by its digital initiatives that accounted for nearly 70% of its policy issuance in 2022.

In 2022, ICICI Lombard's net profit stood at approximately ₹3.9 billion, while the company maintained a solvency ratio of 2.00, significantly higher than the regulatory requirement of 1.5. Moreover, the Total Assets of ICICI Lombard reached around ₹500 billion, marking robust growth in its asset base.

The company has continuously focused on customer-centric innovations. As part of its efforts to improve underwriting efficiency, ICICI Lombard introduced an AI-based chatbot in 2021, which has since handled millions of customer inquiries and assisted in claims processing.

ICICI Lombard's expansion strategy includes entering new markets and products, aiming to grow its presence in the health insurance domain, which is projected to be a significant growth driver. The health insurance segment accounted for about 40% of GWP in 2022 and is expected to continue its upward trajectory as public awareness increases.

As of October 2023, ICICI Lombard remains committed to maintaining its leadership position in the general insurance market, focusing on technological advancements and customer service enhancements to drive future growth.

A Who Owns ICICI Lombard General Insurance Company Limited

ICICI Lombard General Insurance Company Limited is a prominent player in the Indian insurance sector. Established in 2001, the company is a joint venture between ICICI Bank and Fairfax Financial Holdings Limited, a Canadian company. This partnership has positioned ICICI Lombard as one of the leading private sector general insurance companies in India.

As of the latest financial data, the ownership structure of ICICI Lombard is as follows:

In the financial year ending March 2023, ICICI Lombard reported a total income of ₹18,305 crore, showcasing a growth trajectory driven by rising premium collections and market expansion. The company’s net profit for the same period stood at ₹2,014 crore, reflecting a net profit margin of approximately 11.00%.

As of the end of Q2 FY 2023, the company's Gross Written Premium (GWP) was noted at ₹12,500 crore, indicating an increase of 17.00% year-on-year, primarily fueled by growth in both the retail and corporate segments.

The market capitalization of ICICI Lombard as of October 2023 was approximately ₹62,300 crore. This positions the company as one of the top players in the general insurance market in India, with a market share of around 8.50%.

Underwriting performance has also been notable, with a combined ratio of 98.00% for the financial year 2022-2023, indicating solid operational efficiency in managing claims relative to premiums earned.

ICICI Lombard continues to enhance its product portfolio, introducing innovative insurance solutions that include health, motor, and travel insurance, thereby maintaining its competitive edge in the insurance landscape.

ICICI Lombard General Insurance Company Limited Mission Statement

ICICI Lombard General Insurance Company Limited is a prominent player in the Indian insurance sector, primarily focused on providing a wide array of general insurance products. Our mission statement embodies our dedication to offering comprehensive and accessible insurance solutions while ensuring customer satisfaction and trust.

The mission statement of ICICI Lombard can be summarized as follows: "To be the most trusted and preferred general insurance provider, offering innovative products and superior customer service." This guiding principle underlines our commitment to enhancing the customer experience through transparent processes and efficient service delivery.

In the financial year ending March 2023, ICICI Lombard reported a net premium income of ₹18,636 crores, reflecting a growth of 17% compared to the previous year. The company's total income for the same period was approximately ₹22,000 crores, showcasing a robust performance driven by increased policy sales and improved claims management.

The company's solvency ratio stands at 2.00, significantly above the regulatory requirement of 1.50. This demonstrates ICICI Lombard's financial stability and ability to meet its long-term obligations. The claims settlement ratio is reported at 98.10%, indicating a strong commitment to fulfilling customer claims efficiently.

As of September 2023, the company's market capitalization is around ₹60,000 crores, with shares trading at approximately ₹1,050. This positions ICICI Lombard as one of the top players in the insurance sector, reflecting investor confidence in its strategic direction and financial health.

Through its mission-driven approach, ICICI Lombard aims to maintain leadership in the crowded insurance market, striving for continuous improvement in its offerings and ensuring that it remains a reliable partner for its customers.

How ICICI Lombard General Insurance Company Limited Works

ICICI Lombard General Insurance Company Limited is one of India's leading private sector general insurance companies. Established in 2001, it is a joint venture between ICICI Bank and Fairfax Financial Holdings. The company offers a wide range of insurance products including health, motor, travel, and home insurance.

As of the fiscal year 2022-2023, ICICI Lombard reported a Gross Written Premium (GWP) of ₹19,158 crores (approximately $2.3 billion), marking a growth of 15% compared to the previous year. This growth can be attributed to increased premium collections in health and motor segments, which saw substantial contributions to the overall GWP.

The company operates through a well-defined distribution network comprising agents, brokers, and direct sales. It utilizes digital platforms for better customer engagement and streamlining claim processes. In FY 2023, approximately 40% of the total policies were sold through digital channels, highlighting a shift towards online transactions.

A significant aspect of ICICI Lombard’s operations is its focus on underwriting profitability. The company reported a combined ratio of 98% in FY 2023, indicating effective cost management and risk assessment processes in place. A combined ratio below 100% signifies that the company is generating enough premium to cover its claims and expenses.

ICICI Lombard has been proactive in adopting technology in its operations. Its mobile app and website support policy purchase, premium payment, and claim settlement processes. As of FY 2023, the average claim settlement time has improved to 10 days, down from 15 days in FY 2022. This efficiency has positively impacted customer satisfaction levels, leading to a 4.5/5 rating from user reviews.

The company’s claims ratio stood at 70% for FY 2023, which is an essential metric indicating the proportion of claims paid against the premiums earned. This ratio reflects the company's ability to manage underwriting risks effectively. In health insurance, the claims ratio is observed to be higher at 75%, while motor insurance maintains a lower ratio of 65%.

In terms of investments, ICICI Lombard has maintained a diversified portfolio with a focus on fixed income and equities. As of Q2 2023, its investment assets accounted for approximately ₹45,000 crores, with an overall return on investments (ROI) of 8.2%.

Furthermore, ICICI Lombard has been expanding its product offerings. In FY 2023, it introduced a new range of cyber insurance products aimed at small and medium enterprises (SMEs), which contributed to a 12% increase in premium collections in that segment alone.

Customer reach is bolstered by tie-ups with various banks and financial institutions, which enhance distribution capabilities. The total number of policies issued has increased to over 25 million as of March 2023, reflecting a robust market penetration strategy.

Finally, regulatory compliance is a critical aspect of ICICI Lombard’s operations. The company adheres to the guidelines set by the Insurance Regulatory and Development Authority of India (IRDAI), ensuring operational transparency and adherence to capital requirements. As of FY 2023, the solvency ratio stood at 2.2, well above the regulatory requirement of 1.5.

How ICICI Lombard General Insurance Company Limited Makes Money

ICICI Lombard General Insurance Company Limited primarily generates revenue through various insurance segments, including health, motor, and property insurance. For the fiscal year ending March 2023, the company reported a total gross premium income of ₹21,926 crores, reflecting an increase of 15% compared to the previous year.

Among the major segments, the health insurance sector contributed significantly, with gross written premium (GWP) amounting to ₹8,162 crores. This represents a growth of 19% year-over-year. The motor insurance segment generated ₹6,594 crores, which increased by 10% during the same period.

Investment income also plays a crucial role in ICICI Lombard's revenue generation. For the fiscal year 2023, the company's investment income stood at ₹2,712 crores, a modest increase of 6% from the prior year. This income is derived from various investment avenues such as equity, fixed income, and mutual funds.

The insurer maintains a diversified investment portfolio, with approximately 80% of its total investments placed in debt instruments, thereby minimizing risk.

In terms of operating efficiency, ICICI Lombard has achieved a combined ratio of 97.5% in the latest fiscal year. This figure indicates that the company is effectively managing its costs relative to the premiums it receives, with a lower ratio suggesting better profitability.

Overall, ICICI Lombard's strategy of diversifying its product offerings while maintaining strong control over operating expenses has led to a solid financial performance, supported by robust growth in both premium income and investment returns.