Banking, ICICI, Health Insurance, Insurance: Covid-19 Hits Bottomline, But ICICI Lombard Upbeat About Quick Turnaround | Forbes India

Bhargav Dasgupta, MD & CEO, ICICI Lombard

Profits hit but positives ahead

For ICICI Lombard, Covid-19 claims had risen 30x to Rs 602 crore in the April to June 2021 quarter, compared to Rs 20 crore in the corresponding quarter last year. “We cannot do much [about profitability], it has already happened,” he says, but FY23 is expected to be better.Dasgupta is hopeful that, after a gap of two years, the regulator IRDAI will going ahead announce a price correction increase in motor third party insurance premium rates (to account for inflation), particularly since vehicle usage is slowly getting back to normal. ICICI Lombard’s loss ratio— the ratio of losses to premiums earned—for motor own damage (OD) rose 520 basis points to 68.1 percent while that for motor third party (TD) rose 40 basis points to 70.6 percent.

The combined ratio for ICICI Lombard—incurred losses and expenses divided by the earned premium—has also worsened to 121.3 percent in Q1FY22. A ratio above 100 percent means it is paying out more money in claims than it is receiving from premiums. “This year, the combined ratio will be elevated,” Dasgupta said. Much of this could also be due to the fact that non-Covid19 health claims rose 111.8 percent in the June-ended quarter, compared to Q1 FY2021.

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Automation and scale

Post the Bharti integration, ICICI Lombard has become the second largest motor insurance company, and scale advantages are being seen to provide customers better servicing. “We are making the process relating to claims hugely seamless,” Dasgupta says. The insurer uses InstaSpect—whereby customers can raise instant motor insurance claims by streaming a live video through a mobile app—to settle claims and about 82.1 percent of motor OD claims are being done through InstaSpect, as of June 2021, compared to 60.8 in the March-ended quarter. Similarly, in the other segment of motor TD, 75 percent of processing of motor break-in (when the insured forgets to renew the motor vehicle insurance, leading to a lapse)— is done using