ICICI Lombard General Insurance Company Ltd. share price target

at ~44% as on 3QFY22. The digital initiatives keep the company ahead of peers as IL Take Care app is user friendly, serving customers with key functionalities such as quick and easy claim process, online policy renewal, access to cashless hospital network and other features...

Market leadership with long term growth opportunity ICICI Lombard is the largest motor insurer in the private space with 11.7% market share as on January 2022 while it is second largest on an overall basis. Muted auto volume and Covid led to moderation in premium growth. However, with a pick-up in volumes and increase in TP rates, premium...

The strong growth potential of Indian non-life insurance remains the key investment argument of ICICI Lombard (ICICIGI). The company’s RoE and market share remains stable and there are several available levers which could potentially result in positive earnings cycle over next two years.

The profitability of the company in the near-term might be affected by resurgence of the pandemic. This along with spike in claim expenditure for health insurance line, and subdued performance of motor insurance line due to increased competition are expected to be the key factors determining the financial metrics. Hence, with a cautious stance, we maintain our HOLD rating on the stock with a revised target price of Rs. 1,636 based on 7.5x FY23E BVPS. Strong performance from P&C; segment led to increased GDPI...

Operating Profit fell 92.6% YoY to Rs 33cr on higher claims in Health segment. As a result, PAT also declined 61.9% YoY to Rs. 152cr, partly offset by higher capital gains (Rs. 244cr vs. Rs. 61cr in Q1FY21). As the profitability of the company in the near-term might be affected by pandemic related uncertainties, we expect the bottom line to be under pressure for coming few quarters. Hence, with a cautious stance, we...

Gross direct premium income (GDPI) rose 9.3% YoY, positively impacted by P&C; segment (25.7% YoY) and Motor segment (14.3% YoY). PAT grew 6.6% YoY to Rs. 314cr owing to capital gains of Rs. 108cr (vs Rs. 17cr in Q3FY20) and lower claims incurred (-2.3% YoY). Though we may see increase its sales and promotional expenses owing to pressure from competition, we expect the margins to improve from current levels. Hence, we upgrade our rating to BUY on the stock with a rolled forward target price of Rs. 1,591 based on 7x FY23E BVPS....

We continue to have a Buy rating on ILGI with a revised PT of Rs. 1,710. We had management interaction with ICICI Lombard General Insurance (ILGI) to get a business update. Higher collections in the health insurance vertical and momentum on overall business are positive. Recovery (and rebound) in auto sales augur well for the motor business. Strong pickup in the health segment has also helped post GDPI collections, which are encouraging. Premium income had already normalised for H1FY2021 (GDPI growth of 0.8% y-o-y for H1FY2021) and traction for October and November was healthy (YTD GDPI growth of 3%), which indicates...

We continue to have a Buy rating on ILGI with a revised PT of Rs. 1,710. We had management interaction with ICICI Lombard General Insurance (ILGI) to get a business update. Higher collections in the health insurance vertical and momentum on overall business are positive. Recovery (and rebound) in auto sales augur well for the motor business. Strong pickup in the health segment has also helped post GDPI collections, which are encouraging. Premium income had already normalised for H1FY2021 (GDPI growth of 0.8% y-o-y for H1FY2021) and traction for October and November was healthy (YTD GDPI growth of 3%), which indicates...

ICICI Lombard General Insurance (ILGI) reported strong Q2FY2021 results, better-than -expected operational performance, along with lower claim ratios and combined ratios further sweetening the performance. Performance was strong on the cost aspect, with combined ratio (lower is better) at 99.7% (same as Q1FY2021, was 100.4% in FY2020). Solvency ratio has improved further to 2.74x in Q2 FY2020 as against 2.17x in March, which is positive. ILGI trades at 32.9x/26.8x its FY2022E/FY2023E EPS and its long-term business fundamentals have remained steady even during times of crisis....

Gross direct premium income (GDPI) dropped 5.3% YoY, negatively impacted by Motor GDPI (adversely impacted by lockdown) and Health, Travel & PA (owing to lower disbursement from Banks and NBFCs). We expect steady performance from P&C; segment and Motor segment should do well in the coming quarters given the regulatory changes. Given limited upside, we maintain our HOLD rating on the stock with a revised target price of Rs. 1,398 based on 7.5x FY22E BVPS. Industry GDPI weighed down by COVID...

Valuation and Outlook: We have valued the stock based at 7.78x 1-yr forward P/BV mean and has arrived at a price target of Rs. 1487 with a potential upside of 15% and we rate it HOLD.

Valuation and Risks: We have valued the stock based at 7.55x 1-yr forward P/BV mean at 0.8 x discount and has arrived at a price target of Rs. 1155 with potential downside of 13% and we rate it SELL'.

In Q4FY20, Gross Direct Premium Income (GDPI) dropped 8.7% YoY, negatively impacted by de-growth of 4.1% YoY in Motor GDPI. Net premium increased 6.7% YoY, owing to Fire segment (+89.0% YoY). ROE increased 130bps YoY, supported by PAT (+23.8% YoY). The company's strong distribution network should help the company to withstand the challenging times. Hence, we maintain our HOLD rating with a revised target price of Rs. 1,321 based on 7.0x FY22E BVPS. GDPI declines on weak Motor segment...

With a long run-way of growth, improving regulatory environment, and strong innovation opportunities, we remain positive on the general insurance sector. Regulatory crack-down on motor TP pricing is key risk. Pvt. multi-line insurers Mar-20/FY20 GDPI grew -16.2/+11.7% YoY to Rs 67.1/911.8bn. Decline in Mar-20 was along expected lines as new policy sales have declined as a result of the lockdown and renewals have been impacted by the forbearance (until 15-May-20) given by IRDAI on premium payments, and extra time (until June-20) allowed for claiming deduction under the IT Act, for the purchase of health cover.

We will be reviewing our numbers and recommendations once we have a better understanding of the Covid-19 situation. ICICIGI: GDPI (ex-crop) increased 13.3% YoY to Rs 10.4bn. Growth momentum (ex crop) improved from -2.0/12% YoY seen in Dec-19/Jan-20. Health and Motor OD business reported growth (ahead of industry) of 12.4% and 12.7% respectively. FY20TD GDPI for ICICIGI stands at Rs 125.7bn (-7.5% YoY), with ex-crop GDPI is healthy at Rs 121.7bn (+13.9% YoY). We have a SELL on ICICIGI with a TP of Rs 1,170 (Mar-22E P/E of 26.0x and a P/ABV of 5.7x). ICICIGI is currently trading at a FY21/22E P/E of 26.6/22.3x and P/ABV of 4.9/4.0x. NIACL: GDPI grew to Rs 19.3bn, +24.2% YoY (ex. crop at Rs 18.6bn, +26.0% YoY) led by growth primarily in health business. Growth in retail business segments such as motor TP/health improved moderately to 20.7/30.3% YoY. FY20TD GDPI for NIACL stands at Rs 246.9bn (+15.6% YoY), ex-crop GDPI at Rs 219.1bn (+12.7% YoY). We have a SELL on NIACL with a TP of Rs 130 (0.65x Mar-22E ABV (less 5% discount for expected 10.4% supply). NIACL is currently trading at a FY21/22E P/E of 7.4/6.2x and P/ABV of 0.4/0.4x. Bajaj Allianz General Insurance (BAGIC): GDPI slipped by 1.4% YoY in Feb-20 to Rs 7.0bn, (ex-crop GDPI at Rs 6.6bn +1.6% YoY) led by sharp decline in crop business (-32.2% YoY). Motor OD GDPI declined 8.6% YoY vs. industry decline of 2.7% YoY. FY20TD GDPI for BAGIC stands at Rs 120.5bn (+20.1% YoY), while GDPI (ex-crop) is Rs 89.4bn...

The combined ratio worsened to 98.7% compared with 95.9% in Q3FY19 mostly due to roll out of long term insurance policies. The de-growth in the Crop segment and higher loss ratio in the Motor OD segment would affect the profitability in the short term. Hence, we...