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ICICI Lombard Q3 Profit Dips 9% Amid Rising Costs, Claims Pressure

ICICI Lombard reported a dip in its quarterly profit. The decline came despite the company seeing healthy growth in its premium income. Higher operational costs and new gratuity expenses under recent labour laws pressured the bottom line. However, the insurer maintains a very strong capital position above regulatory needs.

Key Points: ICICI Lombard Q3 FY26 Profit Falls 9% to Rs 659 Crore

  • Net profit declined 9% to Rs 659 crore due to a 16% surge in total expenses
  • Gross written premium grew nearly 15%, showing strong underlying business performance
  • New labour codes led to an additional Rs 53 crore gratuity expense, reducing profit
  • Solvency ratio strengthened to 269%, well above the 150% regulatory requirement
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ICICI Lombard's Q3 profit falls 9 pc to Rs 659 crore

ICICI Lombard's Q3 net profit fell 9% YoY to Rs 659 crore despite premium growth, impacted by higher expenses and new gratuity costs.

"The higher cost burden affected the insurer's bottom line despite healthy growth in business. - Company Statement"

Mumbai, Jan 13

ICICI Lombard General Insurance, India's largest private sector general insurer, on Tuesday reported a 9.04 per cent year-on-year (YoY) decline in its net profit for the October–December quarter of FY26.

The company's profit fell to Rs 658.88 crore in Q3 FY26 from Rs 724.38 crore in the same period last financial year (Q3 FY25), according to its stock exchange filing.

Total expenses during the quarter increased by 16.19 per cent year-on-year to Rs 6,039.06 crore, while commission payouts rose by 15.5 per cent to Rs 1,343.1 crore.

The higher cost burden affected the insurer's bottom line despite healthy growth in business.

The company also said that under the new labour codes introduced by the Government, it estimated an additional gratuity expense of Rs 53.06 crore as past service cost for the quarter and the nine months ended December 31, 2025.

This adjustment led to a corresponding reduction in profit and an increase in gratuity obligations.

As of December 31, 2025, the unrecognised past service cost related to gratuity obligations stood at Rs 16.93 crore.

On the positive side, ICICI Lombard's business growth remained strong. The company's gross written premium rose by 14.8 per cent year-on-year to Rs 7,432.98 crore in Q3 FY26 from Rs 6,474.45 crore in Q3 FY25.

Net premium income also increased by 12.7 per cent to Rs 5,685.3 crore. Investment income grew by 8.23 per cent to Rs 909.01 crore during the quarter.

However, claims and operating efficiency showed some pressure. The incurred claims ratio increased to 68.70 per cent in Q3 FY26 from 65.80 per cent a year ago.

The combined ratio also worsened to 104.50 per cent from 102.70 per cent in the corresponding quarter last year, as per its regulatory filing.

Despite this, the company maintained a strong capital position. ICICI Lombard's solvency ratio stood at 269 per cent as of December 31, 2025, well above the regulatory requirement of 150 per cent and higher than 237 per cent recorded in the year-ago period.

- IANS

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Reader Comments

S
Shreya B
Premium growth is healthy at nearly 15%! That's the key takeaway. Short-term profit dips happen due to one-time adjustments like the new gratuity norms. As a long-term policyholder, I'm more reassured by their strong solvency position of 269% 🛡️. It means they can weather storms and pay claims.
A
Aman W
The government's new labour codes are impacting companies across the board. That Rs 53 crore gratuity provision is a significant hit. It's not poor performance, it's a compliance cost. We need to see if this is a one-quarter adjustment or will continue.
P
Priyanka N
As someone who works in finance, the numbers tell a mixed story. Top line growth is excellent. But the bottom line is squeezed by rising commissions (up 15.5%) and claims. They're spending more to acquire business and paying out more in claims. Need to find the right balance.
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David E
Interesting to see the dynamics. The Indian insurance market is growing fast, but so is competition. ICICI Lombard is investing heavily (hence high expenses) to capture that growth. The profit dip might be a strategic choice for market share. The solvency buffer gives them room to maneuver.
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Kavya N
I have health and motor insurance with them. Honestly, as a customer, I care more about hassle-free claim settlement than their quarterly profit. The rise in claims ratio could mean more people are actually getting their claims paid, which is a good thing for us! 🤞

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