ICICI Lombard General Insurance

Research evidence excerpt

ICICI Lombard General Insurance

Global Markets Research

ICICI Lombard General Insurance ICIL.NS ICICIGI IN 16 July 2026

EQUITY: INSURANCE

RatingThis will take time to resolve Down from Neutral Reduce

Target priceMotor insurers face elevated claims with no pricing Reduced from INR INR 1,715power; uncertain times ahead; downgrade to Reduce 1,820

Motor third-party insurance and Supreme Court verdict Closing15 July 2026price INR 1,815

• The Supreme Court of India passed a ruling earlier (link, link) establishing a minimum

Implied upside compensation value for motor insurance claims for loss of domestic care/homemaker. -5.5%

• Given this judgment, ICICI Lombard management has created additional provisions of Market Cap (USD mn) 9,414.0

INR1650mn, taking their loss ratio of motor TP (third party) to 70.6% in 1Q27. The drag on ADT (USD mn) 14.5

1Q27 combined ratio from this is about 280bp. Management also believes that the industry loss

ratios for the motor TP segment will be impacted by 12-15%. Relative performance chart

Industry dynamics could change dramatically; uncertainty going ahead

• Motor TP policy prices in India are regulated/controlled by government. With this judgment, the

way claims are calculated also changes quite dramatically.

• Motor insurers not having any say in either pricing or claims seems unreasonable, in our view.

Management has indicated that the industry body may collectively present their case to

authorities and/or request a third-party tariff hike. Only one price hike has been offered by the

government over the past six years to insurers.

• In our view, uncertainty will loom for most of FY27F as insurers try to find a sustainable solution

to this.

Competitive intensity in fire insurance and two large losses Source: LSEG, Nomura