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🧾 ICICI Lombard General Insurance (ICICIGI): A Consistent Compounder in India's Insurance Landscape

Lesson 97/225 | Study Time: 15 Min

Course: Top Quality Companies

🧾 ICICI Lombard General Insurance (ICICIGI): A Consistent Compounder in India's Insurance Landscape

🏢 Company Overview

ICICI Lombard General Insurance Company Limited (ICICIGI) is one of India’s leading private-sector general insurance companies. It offers a diversified portfolio of products across motor, health, fire, marine, and other insurance segments. The company is known for its strong underwriting practices, technological edge, and steady profitability, making it a favorite among long-term investors.

🌐 Industry Outlook: General Insurance in India

🔹 Market Growth

India’s general insurance market is expected to grow at 13%–15% CAGR over the next decade.
Low insurance penetration (non-life insurance penetration at ~1% of GDP vs global average of 4%) suggests huge untapped potential.
Key drivers: urbanization, rising awareness, digital adoption, government health schemes, and increased automobile & infrastructure activity.

📊 Historical Financial Performance

🔸 Premium & Profit Growth (FY2003 to Trailing FY26)

From ₹208 Cr premium in FY03 to ₹25,836 Cr in Trailing FY26
Profit improved from losses in early years to ₹2,252 Cr in Trailing FY26
Compounded Premium Growth: ~22-Year CAGR of 28%
Compounded Profit Growth: ~22-Year CAGR of 33% from FY13 (excluding early loss years)

📈 Profit Margin Evolution

Year	Profit Margin
FY2012	-7.8%
FY2014	7.2%
FY2021	10.3%
FY2025	8.1%
FY26E	9.3% 🔼

Consistent improvement in margin supported by underwriting discipline
Recent Q1 FY26 margin stands at 9.3%, a strong 200 bps YoY expansion

🔍 Valuation Trends

PE Band (Historical)

Year	Low P/E	High P/E
FY2020	31	55
FY2025	29	45
Trailing FY26	32	38

PBV Band (Historical)

Year	Low PBV	High PBV
FY2020	6	11
FY2025	5	8
Trailing FY26	6	7

➡️ Current valuations near historical average — fair entry point for long-term accumulation

🔎 Q1 FY26 Highlights (YoY)

Metric	Q1 FY26	Q1 FY25	Growth
Gross Premium	₹8,052 Cr	₹7,931 Cr	1.5%
Investment Income	₹942 Cr	₹845 Cr	11.5%
Total Income	₹6,083 Cr	₹5,351 Cr	13.7%
Expenses	₹5,429 Cr	₹4,850 Cr	11.9%
Net Profit	₹747 Cr	₹580 Cr	28.8% ✅
EPS	₹15.06	₹11.77	28.0% ✅
Profit Margin	9.3%	7.3%	+200 bps ✅

🧩 Segmental Performance (Q1 FY26)

Segment	Share (%)	Growth (%)
Motor	46.4%	13.5%
Health	32.8%	16.7%
Misc.	4.9%	21.6% ✅
Fire	2.5%	9.2%
Marine	2.5%	5.8%
Crop	0.1%	-83.9% 🔻

Motor and Health together form ~80% of business, growing steadily.

🔧 Cost Structure

Cost Item	Share in Cost	YoY Growth
Claims Paid	53.6%	9.9%
Claims Outstanding	15.5%	22.3% ⚠️
Employee Cost	7.9%	19.4%
Commissions	17.3%	17.0%
Other Exp.	5.7%	-12.3%

🔸 Overall cost increased by 11.9% YoY; controlled vs income growth (13.7%)

🔮 Estimates for FY26 and Beyond

Metric	FY26E	FY30E	FY35E
Premium	₹27,258 Cr	₹50,133 Cr	₹92,206 Cr
Profit	₹2,535 Cr	₹3,760 Cr	₹7,563 Cr
EPS	₹62	₹92	₹185
Margin	9.3%	7.5%	7.5%

🔸 Price Range Estimate Based on EPS:

Year	Low	Fair	High
FY26	₹1,857	₹2,167	₹2,476
FY30	₹2,755	₹3,214	₹3,673
FY35	₹5,540	₹6,464	₹7,387

🔸 Price Range Estimate Based on Book Value:

Year	BV	Low	Fair	High
FY26	₹304	₹1,823	₹2,127	₹2,431
FY30	₹445	₹2,669	₹3,114	₹3,559
FY35	₹716	₹4,299	₹5,015	₹5,732

⚖️ Technical Chart Analysis (as on Q1 FY26)

📈 3X returns in 8 years
📌 Support Zone: ₹1,491 (ideal buy range)
📌 Target for FY26: ₹2,411
Overall trend remains positive, long-term structure intact

💼 Portfolio Allocation Suggestion

Metric	Weight (%)
Weight by EPS	1.45%
Weight by Book Value	1.41%
Weight by PEG	1.23%
Final Allocation	1.36%

✅ Suitable for moderate allocation in a diversified long-term portfolio

📌 Conclusion: Risk–Reward View for Long-Term Investors

✅ Positives:

Strong & consistent growth in premiums and profits
Expanding margins and efficient cost structure
Favorable sector tailwinds (under-penetration, rising awareness)
Historically steady valuations with scope for re-rating

⚠️ Risks:

Regulatory changes in insurance pricing and commission structures
Higher competition from new-age digital insurers
Possible pressure on investment income in a volatile rate environment

Fairvalue_Profit_Model:

https://docs.google.com/spreadsheets/d/e/2PACX-1vRuINTRCVPtE7AZptBvxZE1B1QfdpttQ6tc-tRLx2BnVZLbNiHOtshMoP2L6mz72A/pubhtml?gid=224882851&single=true

🔒 Disclosure

This blog is for educational and informational purposes only. The views expressed are unbiased and based on historical data and current market trends. Investors are advised to do their own due diligence before making investment decisions.

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Piyush Patel

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