Total expenses including claims paid increased 34% to Rs 3627 crore from Rs 2708 crore a year ago and was higher than the Rs 3581 crore reported in December 2021. Insurance claims paid increased 15% to Rs 1915 crore from Rs 1666 crore a year ago but was lower than the Rs 2083 crore the company paid in December 2021.
The company said the higher expenses were due to current accounting norms which require upfronting of sourcing cost.
“Company has seen higher growth momentum in Q4 and has outgrown market in March 2022. Due to current accounting norm this results in upfronting of sourcing cost whereas benefit of earned premium will be realised over policy period,” ICICI Lombard said.
Operating expenses also remained elevated mainly due to higher advertising and publicity expenses increasing 62% to Rs 866 crore in the quarter ended March 2022 from Rs 535 crore a year ago and also higher than the Rs 834 crore reported in December 2021.
However, the company remained on a strong footing with a solvency ratio of 2.46 times in March 2022 similar to the 2.45 times it reported in December 2021 though lower than the 2.90 times a year ago. It was higher than the minimum regulatory requirement of 1.50 times. The solvency ratio of an insurance company is the size of its capital relative to all risks it has taken.
ICICI Lombard completed the acquisition of Bharati Axa General Insurance in September 2021 after announcing the deal a year ago as a result the numbers for the current year are of the consolidated entity.
The company’s gross direct premium income (GDPI) stood at Rs 17,900 crore billion in fiscal ended March 2022 as against Rs 14,003 crore a year ago. Net profit for fiscal 2022 fell 14% to Rs 1271 crore from Rs 1473 crore in the year ended March 2021.
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