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AM Best has affirmed ICICI Lombard General Insurance Company's Financial Strength Rating at B++ (Good), with a Long-Term Issuer Credit Rating of "bbb+" and India National Scale Rating of aaa.IN (Exceptional). The outlook remains stable. This affirmation underscores the company’s very strong balance sheet strength and solid operating performance.
ICICI Lombard's risk-adjusted capitalisation, measured by Best’s Capital Adequacy Ratio, is expected to remain robust in the medium term. The insurer's financial flexibility is reinforced by its history of successful capital-raising initiatives. Notably, the operating performance remains strong with a five-year average return on equity of 17.6%, attributing significant earnings from investment income, which helps to offset underwriting losses.
Recent improvements in underwriting performance, particularly due to lower claims in motor and health insurance, along with effective portfolio management, lead to better underwriting margins. While the company is the second-largest non-life insurer in India, accounting for an 8.6% market share by gross domestic premium in FY 2024, ongoing competitive pressures may continue to challenge its technical margins.
Given this performance outlook, investors hold the position that ICICI Lombard presents a cautious buy opportunity due to its strong fundamentals and potential for improved profitability amid competition.
All announcements from ICICI Lombard General Insurance Company Limited