Target: ₹1,875

CMP: ₹1,171.40

We participated in the Analyst Meet held by ICICI Lombard (ICICIGI) on Thursday and gleaned the following key takeaways: ICICIGI has, wholeheartedly, adopted the Cloud and this has led to material beneficial impact; possesses a very robust internal data science practice, which is having a significant impact on business outcomes; and the existing digital solutions are continuing to ramp up, ICICIGI is managing climate risk better, doing better in Motor and focusing on health indemnity business.

Merely moving the Cloud was not enough and hence, ICICIGI has ensured it converted its operations to becoming Cloud-native. Following this, the core transformation program, Orion was kicked off.

ICICIGI has flagged that it has a lot of data available to it and is obtaining a significant amount of data from the insurance eco-system itself, particularly the IIB or Insurance Information Bureau.

The growth in GWP sourced through ILTakecare has increased 3.2x y-o-y in Q3 and there has been a 2x rise in DIY journeys using RIA chatbot in Q3. Risk from climate change is a key emerging risk since the frequency of nat cats has gone up.

We value ICICIGI at 39x FY25 P/E for an FY23-26E EPS CAGR of 16 per cent. At our target, the implied FY25 P/B is 6.8x whereas the prospective RoE profile is at about 17 per cent.