Target: ₹1,808
CMP: ₹1,353.85
ICICI Lombard General Insurance Company is one of the leading private sector general insurance companies in India with a gross written premium (GWP) of ₹13,592 crore for the year ended FY21. The company issued over 26.2 million policies and settled over 1.86 million claims in FY21.
ICICI Lombard has 8.3 per cent market share on overall basis and 13 per cent in private general insurance space. IT is second largest motor insurer (largest in private space) with about 12 per cent market share as on Q3-FY22. The company is also second largest in the motor third – party insurance. Hence, we expect the business to grow further considering growth in auto sales and recent development regarding 3rd – party insurance premium hike.
The digital initiatives holds well for the company as the turnaround time, user-friendliness and customer connectivity is productive at the organisation level. ICICI Lombard scores over its peers on profit market share and ROE profile and has managed its investment book exceedingly well.
The stock has underperformed due to loss of premium market share, higher underwriting losses and higher claims due to the Pandemic thereby impacting ROE for FY’21-22. We expect ROE to bounce back strongly to 18.6 per cent in FY’22-23 aided by its digital strategy and superior cost management.