ICICI Lombard Stock Crashes 11% After Q1 Profit Slumps 46% On Higher Insurance Claims
ICICI Lombard General Insurance Company shares collapsed by over 10.5% on Thursday morning, trading at ₹1,622.50. The sell-off followed Q1 FY27 earnings report that showed a 46% year-on-year drop in net profit. Brokerages immediately downgraded the stock, citing severe underwriting pressure, escalating motor and fire claims, and a deteriorating combined ratio that spiked past expectations to 107.2%.
- Republic Business
- 2 min read
Shares of ICICI Lombard General Insurance Company Limited plunged nearly 11% in early trade on Thursday after the private general insurer reported a significant miss on its first-quarter earnings, triggering brokerages to cut their ratings on the stock.
As of 10:16 AM IST, the stock was trading down ₹192.10 at ₹1,622.50, recovering marginally from an intraday low of ₹1,544.60 on the NSE.
The correction comes after the company's exchange filing, which declared a 46% year-on-year drop in standalone net profit after tax (PAT) to ₹403 crore for the June quarter, down from ₹747 crore in the same period last fiscal year. While Net Premium Earned showed a healthy top-line trajectory, rising 16% to ₹5,950 crore, severe underwriting losses heavily compromised the company’s structural margins.
Rising Claims & Regulatory Blows
The company's combined ratio, an important benchmark of an insurance company’s underwriting profitability, worsened to 107.2% from 102.9% a year ago. A ratio above 100 indicates that the insurer is paying out more in claims and operational expenses than it is collecting in premiums.
They attributed this to two events:
- Two large-scale commercial fire insurance claims resulted in an unexpected hit of ₹63 crore.
- Supreme Court judgment regarding Motor Third-Party (TP) portfolio claims required ICICI Lombard to aggressively scale up its claim reserves by an additional ₹165 crore.
Brokerages Weigh
Leading domestic brokerages turned bearish on the stock after Q1 results. Motilal Oswal downgraded its rating to 'Neutral'. It cautioned that visibility on near-term profitability remains bleak due to competitive pricing pressures in the motor and commercial segments.
Nuvama downgraded it to a 'Reduce' rating, cutting its price target to ₹1,660. Nuvama noted that competitive pricing in the commercial fire segment has limited the company's capacity to absorb premium shocks.
Despite roadblocks, the company's solvency ratio remains at 2.71x, exceeding the mandatory regulatory threshold of 1.50x. This buffer ensures the insurer remains stable while navigating the industry headwinds.
Published By : Shourya Jha
Published On: 16 July 2026 at 10:32 IST