Downgrades

Niva Bupa (Niva) reported 17% YoY growth in NEP to INR14.2b (in-line) in 2QFY26. For 1HFY25, NEP grew 18% YoY to INR26.4b.

ICICI Lombard’s (ICICIGI) gross written premium rose 2% YoY in 2QFY26 to INR70.6b (in line), impacted by the 1/n regulation. NEP grew 12% YoY to INR56.5b (16% beat).

We believe Star Health (Star) is on a steady earnings growth trajectory driven by better incremental balance between volume growth and profitability, as witnessed in its Q1FY26 result (14% YoY growth in GEP while IFRS PAT grew 44% YoY).

Star Health’s (STARHEAL) net earned premium rose 12% YoY to INR39.4b (in line) during 1QFY26. Claims ratio at 69.5% (in line) grew 190bp YoY, driven by a 15% YoY increase in net claims incurred to INR27.4b (in line).

The company is currently facing challenges due to the new accounting standards and a surge in claim frequency and severity, which are affecting its profitability. However, recent price adjustments are expected to mitigate the impact of rising medical costs and hospitalisation trends, potentially leading to a gradual decline in the claims ratio over the next few quarters. A potential reduction in expense ratios and stable commission ratios are expected as the company grows. Additionally, the company is adopting a targeted approach by focusing on specific market segments...

Earnings lagged estimates (~15%) at Rs. 510 crore, declined by 2% y-o-y mainly led by lower investment income (down 17% y-o-y) in Q4FY25. GDPI was also muted at just ~2.3% y-o-y in Q4 mainly due to slowdown in motor segment and deferred accounting of longterm policies.

ICICIGI’s gross written premium was 10% up YoY in 4QFY25 to INR69b (in line), impacted by 1/n regulation implementation for long-term products. NEP grew 20% YoY to INR52.3b (15% beat). For FY25, it grew 17% YoY to INR198b.

ICICIGI’s gross domestic premium income (GDPI) was flat YoY in 3QFY25 at INR65b (in line), impacted by 1/n regulation implementation for longterm products.

ICICIGI’s GDP grew 11% YoY in 2QFY25 to INR69b (3% miss). NEP grew 17% YoY to INR50b (3% ahead of our estimates).

Profit jumped 40% YoY in 4QFY24 to INR1.4b, in line with our estimate.

Lower-than-expected volume growth and higher-than-expected combined ratio have set up a weak H1FY24 for Star Health (Star). The balance between premium price hike and tighter underwriting, leading to optimal volume growth and combined ratio, would be key in setting the trajectory back to the long-term targets of 20% RoE, 20% growth with 200% solvency.

ICICI Lombard’s (ICICIGI) strategy remains that of profitable growth. This can entail profits over market share in motor (YoY 400/146bps lower loss ratio/market share in motor in Q1FY24) with higher-than-industry growth in health (12/131bps gain in retail/group health market share YoY in Q1FY24).