ICICI Securities has upgraded ICICI Lombard General Insurance to a 'Buy' rating with a target price of ₹2000, significantly higher than Motilal Oswal's ₹1730 target. The brokerage maintains its BUY rating with a revised target price of ₹2000, based on a 28x FY28E EPS of ₹71.4 (up from ₹69 earlier). According to Moneycontrol, ICICI Securities believes the recent regulatory overhaul, which lowers distribution costs, positions large incumbents like ICICI Lombard better to capture structural growth opportunities. The brokerage notes that management commentary remains strong on motor insurance (basis overall growth outlook and gain in renewal market share) as well as commercial lines, with expectations of recovery in motor TP loss ratios to normalized levels.
ICICI Lombard General Insurance delivered robust financial performance in Q2 FY27, with net profit rising 15.48% year-on-year to ₹946.40 crore compared to ₹819.54 crore in Q2 FY26. According to the latest exchange filing, this growth was driven by healthy expansion in premium and investment income, despite facing significant underwriting pressures. The insurer's gross written premium increased 9.11% Y-o-Y to ₹7,702.09 crore compared to ₹7,058.86 crore in the corresponding period last year. As per The Hindu BusinessLine, the company's gross direct premium income (GDPI) reached ₹15,110 crore in H1FY27 compared to ₹14,331 crore in H1FY26, showing 5.4% growth against industry growth of 8.9%. The company's Net Premium Earned rose 17.7% year-on-year to ₹6,652 crore from ₹5,652 crore, while total income increased 19.2% to ₹7,843.72 crore from ₹6,583 crore.
The company's underwriting performance deteriorated significantly, with underwriting loss widening to ₹318.4 crore in Q2 FY27 compared to ₹178.4 crore in the corresponding quarter last year. As per the latest reports, the combined ratio increased to 107% in Q2 FY27 from 105.1% in Q2 FY26, indicating that claims and expenses exceeded premiums earned. The incurred claim ratio stood at 72.7% as of September 30, 2026, compared with 72.1% in the previous year. The expense of management ratio rose to 36.3% from 31.9% in Q2 FY26, with the ratio rising 240 basis points Y-o-Y. The solvency ratio improved to 275% from 273%. However, the loss ratio came in at 72.7%, which was below expectations according to Jefferies, viewed as a positive surprise. The increase in earnings bakes in better underwriting results, considering expectations of recovery in motor TP loss ratios to normalized levels and higher investment income.
Net earned premium rose 17.7% year-on-year to ₹6,652 crore from ₹5,652 crore, while total income increased 19.2% to ₹7,843.72 crore from ₹6,583 crore. However, gross direct premium income (GDPI) grew only 3% year-on-year to ₹6,792 crore in Q2 FY27, compared with industry growth of 7%. As reported by CNBC TV18, excluding crop and mass health insurance, ICICI Lombard's GDPI grew 13.9% in Q2 FY27, ahead of the industry's 13.2% growth. The company's expenses rose 19.55% Y-o-Y to ₹6,970.2 crore, with commission-related expenses growing 25.3% Y-o-Y to ₹1,269 crore. The core combined ratio remained stable year-on-year, indicating limited movement in the underlying metric according to HSBC.
In the motor insurance segment, ICICI Lombard achieved 13% growth in the first half of FY27, matching industry growth of 13.1%. New vehicle sales grew 38.5% in Q2 FY27 against industry growth of 26.9%, while the company's new two-wheeler business grew 50.8%. The company maintained a 10.3% market share in the motor insurance segment in H1 FY27. In health, travel and personal accident insurance, the company recorded 26.8% growth in Q2 FY27, compared with industry growth of 18.9%. Retail health insurance grew 64% in Q2 FY27, nearly twice the industry's growth of 32.3%, with the company's market share in retail health insurance standing at 5% in September 2026. According to Managing Director & CEO Sanjeev Mantri, the company maintained its leadership position in marine cargo and engineering lines of business for H1FY27. The company's retail health segment maintains its strong momentum, gaining market share with significant traction in its 'Elevate' product, as highlighted by Motilal Oswal.
ICICI Lombard's share price responded positively to the results, rising 0.92% to ₹1,715.70 on BSE on Wednesday following the earnings announcement. The stock opened at ₹1,685.80 and traded in the range of ₹1,681.00 to ₹1,753.30 during the session. Looking at its last 52-week performance, the stock has touched a low of ₹1,423.10 and a high of ₹2,064.90, with the company having a market capitalisation of ₹92,610.01 crore and a P/E ratio of 68.30. The company's board approved an interim dividend of ₹7 per equity share for FY27, equivalent to 70% of the face value of ₹10 per share. October 23, 2026, has been fixed as the record date to determine shareholders eligible for the dividend, with payment to be made on or before November 12, 2026. The interim dividend will be paid to equity shareholders subject to deduction of tax at source at applicable rates. Both brokerages acknowledge the company's improving performance, with Jefferies expecting benefits from commission regulation changes and HSBC noting the stock's valuation already reflects its relative strength.
