ICICI Lombard General Insurance Company Limited (ICICIGI.NS) Q3 FY2026 Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. A very warm welcome to ICICI Lombard General Insurance Company Limited's Q3 and 9 Months FY 2026 Earnings Conference Call. From the senior management, we have with us today Mr. Sanjeev Mantri, MD and CEO of the company; Mr. Gopal Balachandran, CFO; Mr. Anand Singhi, Chief Retail and Government, Mr. Girish Nayak, Chief Technology and Health, Underwriting and Claims; Mr. Sandeep Goradia, Chief Corporate Solutions, International and bancassurance; and Mr. Gaurav Arora, Chief Reinsurance, Underwriting and Claims for Property & Casualty. Please note that any statements, comments are made in today's call that may look like forward-looking statements are based on the information presently available to the management and do not constitute an indication of any future performance as future involve risks and uncertainties which could cause results to differ materially from the current views being expressed. [Operator Instructions] I now hand the conference over to Mr. Sanjeev Mantri, MD and CEO, ICICI Lombard General Insurance Limited. Thank you, and over to you, sir.

Good evening to each one of you. Thank you for joining the earnings conference call for ICICI Lombard for quarter 3 and 9 months financial year 2026. At the outset, let me wish you all a very Happy New Year and best of health and happiness. I would like to give you a brief overview of the recent economic industry trends, which have shaped the operating environment over the past few months. Following that, our CFO, Mr. Gopal Balachandran, will take you through the company's financial performance for the recently concluded quarter and 9 months. The Indian economy recorded a GDP growth of 8.2% in quarter 2, up from 7.8% in the preceding quarter. The expansion was underpinned by sustained government capital expenditure coupled with an increase in private CapEx, robust services activity and a rebound in private consumption. Consumption was further supported by easing inflation and the GST rationalization implemented in late September 2025. Coming to Q3 financial year 2026, the index of industrial production, IIP data indicates positivity supported by manufacturing growth, continued infrastructure development and a turnaround in consumer goods segment. E-way bill generation and toll collections during the same period recorded a growth of 13% and 17% Y-o-Y, reflecting strong underlying economic activity. We believe that these high-frequency indicators should augur well for our commercial line of segment. Boyd by GST rationalization, the automobile sector has seen a significant uptick in sales. According to retail sales data based on vahan registration, the auto industry recorded a growth of 19.5% for quarter 3 2026, resulting in a total of 9.4 million vehicles sold. Within this, private car has seen a growth of 19.3%, translating to 1.3 million vehicles. The 2-wheeler segment grew by 19.2% with the 7 million vehicles, whereas commercial vehicles grew by 22.2% with 1.1 million vehicles being sold. Interestingly, the overall growth in the vehicle sales is the highest in last 12 quarters. To add to it, this growth is more broad-based as Tier 3 cities and beyond have demonstrated faster growth in both private car and 2-wheeler segments. This is also corroborated by strong growth of 28.8% in tractor sales for the quarter. Overall, the acceleration in new vehicle sales for the quarter has also led to a 7.7% growth for calendar year 2025 with 28.1 million units being sold. The landmark decision of exemption of GST on retail health insurance has significantly improved affordability and increased awareness. The industry has passed on the complete benefit of GST exemptions to the end customers. This has led to an increase in policy uptake as more customers are seeking health care protection. Here too, the growth in retail health appears to be broad-based across markets and it's supported by a surge in first-time buyers, especially for Tier 2 and Tier 3 cities, which is a positive for the sector. On the regulatory front, the government of India took a significant step during the quarter by introducing forward-looking reforms in the insurance laws with the passage of Sabka Bima Sabki Raksha, amendment of insurance laws Bill 2025. While most of these amendments will have far-reaching effects on the insurance sector over time, a few important changes pertaining to the Insurance Act are as follows. Foreign investment in an Indian insurance company has enhanced from 74% to 100%, thereby supporting capital inflows, enabling provisions in the Amendment Act to facilitate business other than traditional insurance underwriting and distribution, thereby allowing insurers to offer holistic risk management services. Simplification of provisions relating to investments of assets. We are excited about these changes, and we do believe that this should be structurally positive and would accelerate the growth and development of the insurance sector. This will also facilitate ease of doing business and provide better protection and risk management solutions to the policyholders. In another significant reform in November 2025, the Government of India formally made effective 4 new central labor codes, including the code on Social Security 2020. Consequent to this, benefits like gratuity, leave engagement, et cetera, paid on basic salary are now required to be paid basis the new broader definition of wage. We believe these changes should translate into a more resilient workforce and strengthen employee security over time. This change has a onetime impact on the financials, which will be covered by Gopal in his section. Let me now dwell upon the industry performance for the period ended 31st December 2025. The general insurance industry reported a GDPI growth of 8.7% for 9 months 2026. Excluding crop and mass health segment, the GDPI growth at 13.3% -- growth stood at 13.3% for the period 9 months 2026. Speaking on specific segments within the industry, Commercial segment recorded a healthy growth of 14.8% for 9 months 2026 and 16.3% for quarter 3 2026. This growth led by strong momentum in the Fire line, which grew at 20.1% for 9 months 2026. As mentioned above, this is driven by an increase in CapEx, particularly in areas such as road, railways and renewable energy. The Motor segment grew at 8.9% in 9 months 2026 compared to 7.6% in H1 2026. For quarter 3 financial year 2026, the growth stood at 10.9%, supported by festive season demand and the positive impact of GST rationalization. Health segment grew at 14.2% for 9 months 2026 with a strong momentum of 27.6% growth in quarter 3 of 2026, led by retail health, which grew at 33.6% and group health growth of 23.1%, underscoring strong demand across the segment. On the other hand, industry combined ratio worsened from 113.3% in H1 of 2025 to 119.2% in H1 of 2026, indicating continued underwriting pressure. During the same period, ICICI CoR moved from 103.2% in financial year 2025 to 104.0% in H1 of 2026, reinforcing our superior financial performance through disciplined underwriting. The motor line of business remains a key area of stress with the industry CoR increasing from 124.8% in H1 of 2025 to 128.5% in H1 of 2026. ICICI Lombard demonstrated better portfolio management in motor insurance with the combined ratio improving from 108% to 106.9% during the same period. I will now proceed to present our company's performance across key business segments. For 9 months 2026, gross domestic premium income of the company grew by 3.6% compared to industry growth of 8.7% for the same period. Within this, for quarter 3 2026, the company reported a premium growth of 13.3% compared to industry growth of 11.5%, thereby improving its market share from 8.1% for quarter 3 2025 to 8.3% for quarter 3 2026. For December 2025, in particular, the company's growth in GDPI was 16.1% in comparison to the industry growth of 14.4%. Excluding crop and mass health, the company recorded a growth of 7.5% during 9-month financial year 2026 against the industry growth of 13.3%. Within this, for quarter 3 2025, the company recorded a growth of 16.4% as against the industry growth of 20.1%. In the commercial line segment, our growth stood at 7.4% and 6.8% for quarter 3 2026 and 9 months 2026, respectively, while the industry grew by 16.3% for quarter 3 2026 and 14.8% for 9 months 2026. We continue to be focused on delivering profitable growth through disciplined underwriting, prudent risk selection and portfolio diversification, resulting in the growth of Fire segment by 18.8% in quarter 3 2026, driven by 27.4% growth in the SME segment. Further, the company delivered a 19.3% growth in Fire compared to 15.8% industry growth for the month of December 2025. In the Engineering segment, our growth stood at 15.2% and 13.3% for quarter 3 2026 and 9 months 2026, respectively, while the industry during the same period grew by 11.5% and 12.9%, respectively. This led to we attaining leadership position in Engineering segment for the 9 months 2026. On the other side, for 9 months 2026, the company's growth for marine cargo and liability segment was not in line with the industry growth on account of portfolio rationalization. However, we continue to maintain our leadership position in these lines. In Motor segment for 9 months 2026, the company recorded a growth of 5%, whereas the industry grew by 8.9%. While our growth in H1 of 2026 was only 2.2%, a rebound was observed in Q3 2026, driven by an underlying buoyancy in new motor vehicle sales. Consequently, the motor segment grew by 9.3% in Q3 2026, supported by a strong growth of 16.1% in December 2025. Despite heightened competitive intensity in the recent quarters, we remain focused on profitable growth, driven by continuous expansion across distribution channels and a more granular portfolio segmentation. Importantly, the company continues to maintain its leadership position in the motor segment with a market share of 10.7% for 9 months 2026. The company's portfolio -- motor portfolio mix of private car, 2-wheeler and commercial vehicle stood at 53.6%, 25.8% and 20.6%, respectively, for 9-month financial year 2026. In the health segment, the company grew by 42% and 13.8% for quarter 3 2026 and for 9 months 2026, respectively, as against the industry growth of 27.6% and 14.2% for quarter 3 financial year 2026 and 9 months 2026, respectively. Our health business delivered a robust growth of 85.8% in quarter 3 2026 and 44.8% in 9 months 2026, significantly outperforming the industry growth of 33.6% in quarter 3 and 16.5% for 9 months 2026. Our growth was fueled by new-to-industry customer growth of 1.7x for quarter 3 2026 and 1.4x for 9 months 2026. Thus, our market share increases to 4% in 9 months 2026 compared to 3.2% for the same period in the previous year. And for quarter 3 2026, our market share has increased to 4.5% from 3.2% for the same period in previous year. The strong performance has also been driven by sustained investment in strengthening our retail distribution capabilities across channels. The Group Health segment registered a growth of 26.6% and 5.9% for quarter 3 2026 and 9 months 2026, respectively, while the industry grew by 23.1% for quarter 3 2026 and 12.6% for 9 months 2026. I would now like to apprise you of certain strategic initiatives that continue to drive operational excellence and customer centricity across the organization. The One IL One Call Center initiative continues to deliver strong momentum in the company's transition towards a digital-first do-it-yourself servicing model. In December, over 60% of the total service engagements were managed digitally as against 38% only for April 2025. This was possible due to our AI interventions through various bots, which has helped customers in adopting DIY service modes. This has led to improved turnaround times, service consistency and increased productivity. Our differentiated service initiatives, which we can -- which we had spoken about in our previous call have resulted in increase of our call center NPS to 73 in Q3 of 2026 from 60 in Q1 of financial year 2026. Building on our One IL One Digital framework, we continue to take positive strides toward offering a seamless and omnichannel experience across our website and the IL TakeCare platform. As you might recall, the IL TakeCare app was initially launched to provide a continuum of care for our health insurance customers. Over time, the app has continuously evolved with new functionalities and features, making it a comprehensive one-stop solution for service and sales across multiple retail product lines. The app has now crossed 19.7 million downloads as of December 31, 2025, reflecting growing customer engagement and digital adoption. The customer registered -- the company registered a GWP of INR 3.54 billion for 9 months 2026 from the IL TakeCare app as against INR 1.45 billion for the same period last year. IL TakeCare has also made significant progress in addressing key customer service requirements and delivering a seamless insurance experience. Just to highlight, for TripSecure+, our premier travel insurance product, customers can now independently manage claims, policy cancellations, extensions and modifications through the app. These enhancements have enabled 93% of service requests to be processed on DIY basis without the need for manual intervention leading to a corresponding reduction in support call volumes. Notably, 79% of claim intimation for TripSecure+ in December 2025 were also initiated through IL TakeCare app as compared to 22% in July 2025. In order to continually enhance our efficiency levels in motor claims, we have expanded our cashless garage network from 13,600-plus garages in quarter 3 2025 to 15,000 garages in quarter 3 2026. 75.2% of our non-OEM claims for quarter 3 2026 were serviced at PPN, up from 73.6% in quarter 3 2025, leading to an enhanced customer experience. In the retail segment, 99.6% of our total claims were paid within 30 days and for motor insurance own damage segment, 96.8% of our claims were paid within 30 days for the period ended 9 months 2026. As a result, our NPAs for H1 2026 for health claims stood at 70% and for motor claims stood at 69%, reinforcing our position as a customer-centric organization. In conclusion, the domestic macro environment remains supportive with broad-based consumption showing healthy momentum. We remain focused on building a sustainable long-term franchise anchored in the strength of our technology processes and service architecture. Through our One IL One Team initiative, we continue to sharpen execution, drive consistency and deliver customer outcomes at scale. We are well positioned to convert a more supportive demand environment into a steady high-quality growth while maintaining discipline in underwriting, service delivery and operating efficiency. I will now request Gopal to take you through the financial numbers for the period 9 months 2026.

Thanks, Sanjeev, and good evening to each one of you. I will now give you a brief overview of the financial performance of the recently concluded quarter and 9 months. We have uploaded the results presentation on our website. You all can access it as we walk you through the performance numbers. With effect from October 1, 2024, long-term products are accounted on a 1/n basis as mandated by our regulator. Please refer to the investor presentation on Slide 16 for a much more detailed information on comparison of financials on n and 1/n basis. Now let me update on GDPI numbers. Please note these numbers are on 1/n basis. The GDPI of the company was at INR 213.72 billion in 9 months current year as against INR 206.23 billion in 9 months FY '25, a growth of 3.6% as against the industry growth of 8.7%. GDPI of the company was at INR 70.41 billion in Q3 FY '26 as against INR 62.14 billion in Q3 FY '25, a growth of 13.3% as against the industry growth of 11.5% resulting in our market share to grow from 8.1% in quarter 3 last year to 8.3% in quarter 3 of the current year. On the retail side of the business, GDPI of the motor segment was at INR 33.99 billion in Q3 FY '26 as against INR 31.09 billion in Q3 FY '25, registering a growth of 9.3%. The advance premium for Motor segment was at INR 41.26 billion as at December 31, 2025, as against INR 39.13 billion as at September 30, 2025. GDPI of the health segment was at INR 20.44 billion in Q3 this year as against INR 14.53 billion in Q3 FY '25, registering a growth of 40.6%. Within this, our retail health segment registered a robust growth of 85.8% during the same period. GDPI of our commercial lines was at INR 15.72 billion in Q3 FY '26 as against INR 14.63 billion in Q3 FY '25, registering a growth of 7.4%. Our agents, which includes the point-of-sale distribution count was 1,50,458 as at December 31, 2025, up from 1,47,408 as at September 30, 2025. Our combined ratio on 1/n basis was 104.2% in 9 months current year as against 102.9% in 9 months last year. On an n basis, our combined ratio was 103.1% in the current year as against 102.8% in 9 months last year. The combined ratio on again 1/n for this quarter 3 current year was 104.5% as against 102.7% in Q3 last year. Again, on an n basis, for this year, quarter 3, combined ratio was 103.1% as against 102.3% in Q3 FY '25. We have been talking about the impact of cat losses. If one was to exclude the impact of cat losses of INR 0.84 billion in 9 months current year and INR 0.94 billion in 9 months of last year, the combined ratio on a 1/n basis was 103.7% and 102.3%, respectively. The same numbers on an n basis was 102.6% and 102.2%, respectively. Now coming to the quarter, excluding the impact of cat losses of INR 0.11 billion in Q3 current year, the combined ratio on 1/n was 104.3% and the same numbers on an n basis was 103%. There were no cat losses in Q3 FY '25. And as mentioned by Sanjeev in his opening remarks, excluding the impact of wage code of INR 0.55 billion, our combined ratio on a 1/n basis for 9 months current year and quarter 3 current year was 103.9% and 103.5%, respectively. On an n basis, our combined ratio, excluding the wage code impact was 102.8% and 102.2% for 9 months and Q3, respectively. Our investment assets during the quarter rose to INR 582.96 billion as at December 31, 2025, up from INR 562 billion as at September 30, 2025. Our investment leverage net of borrowings was 3.6x at December 31, 2025, as against 3.57x at September 30, 2025. Investment income was at INR 37.57 billion in 9 months current year as against INR 33.73 billion in 9 months last year. On a quarterly basis, investment income was at INR 12.19 billion in Q3 current year as against INR 11.21 billion in Q3 last year. Our capital gains, net of impairment on investment assets stood at INR 9.33 billion in 9 months current year as against INR 7.96 billion in 9 months last year. Capital gains stood at INR 3.17 billion in quarter 3 current year as compared to INR 2.76 billion in Q3 last year. On a 1/n basis, our PBT grew by 10.8% at INR 29.41 billion in 9 months current year as against INR 26.53 billion in 9 months last year. Again, for the quarter, on a 1/n basis, PBT degrew by 9.4% for the current quarter as against INR 9.6 billion in Q3 last year. Consequently, on a 1/n basis, PAT grew by 11.3% at INR 22.25 billion in 9 months current year as against INR 19.99 billion in 9M last year. The same numbers on an n basis for profit after tax grew by 13.8% at INR 22.22 billion in 9 months current year as against INR 19.53 billion in 9 months last year. On a 1/n basis, PAT degrew by 9.1% at INR 6.59 billion in Q3 current year from INR 7.24 billion in Q3 last year. Again, coming back to an n basis, PAT remained flattish at INR 6.8 billion in Q3 current year from INR 6.79 billion in Q3 last year. Excluding the impact of wage code, on a 1/n basis, PAT was INR 22.67 billion in 9 months current year and INR 7 billion in Q3 current year, registering a growth of 13.4% and a degrowth of 3.3%, respectively. The same numbers on an n basis, PAT was INR 22.64 billion for 9 months current year and INR 7.21 billion in Q3 of this quarter, registering a growth of 15.9% and 6.3%, respectively. Coming to ROE. On a 1/n basis, it was 19.5% in 9 months as against 20.8% in 9 months last year. ROE for the quarter 3 current year was 16.5% as against 21.5% in Q3 FY '25. Excluding the wage code impact, on a 1/n basis, ROE was 19.8% and 17.5% in 9 months and Q3 of the current year, respectively. Solvency ratio was at 2.69x at December 31, 2025, as against 2.73x at September 30, 2025, continues to be higher than the minimum regulatory requirement of 1.5x. As I conclude, I would like to state that we are all aligned with our resource of driving profitable growth, consistent and sustainable value creation for all our stakeholders while ensuring that the interest of the policyholders are in the forefront at all times. I'd like to thank you all for attending this earnings call, and we will now be happy to take any questions that you have. Thank you.

[Operator Instructions] Our first question comes from the line of Supratim Datta from Jefferies.

My first question is on the labor code. We understand that there is a INR 50 crore impact from the labor code changes. Just wanted to understand what proportion of this is recurring versus what proportion of this was onetime? That was the first question. Secondly, coming to growth, now despite the GST tailwinds, the growth even on the motor side, if I see, has been slower than what the industry has witnessed. And I do understand that competition has been elevated. But the regulator at the regulatory level has taken multiple steps, be it expense of management guidelines or discussions with the industry to reduce the competitive intensity or bring in some bit of rationality, yet we are not able to see that happen. So from here, if I'm taking a 2- to 3-year view, what will drive growth in the motor segment for a player like you, which already has 10%, 11% market share. That's -- if you could throw some light on that, that would be very helpful. And lastly, on the motor TP loss ratio. I do understand last time there was a [ TP ] but this time, it seems to be a more normalized loss ratio. Should we assume that the reserve releases would hold and there is no further release that would come in the fourth quarter? Or could there be further releases that would come in the fourth quarter? If you could throw some light on the reserve release, that would also be very helpful.

Thanks, Supratim, for those questions. On the first one, so far as the labor code is concerned, obviously, the impact of INR 55 crores in that sense is onetime because it's primarily the liability resulting from an actuarial valuation for the past service cost, insofar as wages is concerned. Having said that, obviously, this code is also evolving. So hence, to that extent, we will have to see if there are any more incremental guidelines or rules that come into existence. But at this point of time, basis whatever has been released thus far, this impact of INR 55 crores is what is the past service cost, which is more -- which is a complete impact that we have taken in the financials of quarter 3 and 9 months. And if you would have seen also the disclosure that we have made, there is an element of roughly about INR 17 crores. This is the amount of unamortized cost, which will kind of get amortized over the next 3 years and in line with again the actuarial report. Those are the 2 numbers insofar as the impact of wage code is concerned. INR 55 crores is more a onetime impact in the financials. INR 17 crores of amortized cost is something that will get amortized over the next 3 years. So that's in response to the first one. On the response to the third question, motor third-party loss ratios, I think I will keep reiterating this. What we have told the market is overall motor loss ratio range that we have spoken is between 65% to 67%. And if you look at the 9-month numbers, and that is something that we keep urging that you should keep looking at year-to-date numbers than more quarterly outcomes. The 9-month numbers for the current year motor overall stands at about 66.3%. This is both own damage and third-party put together. It's kind of pretty much playing out in line with the range that one has spoken about. And hence, to that extent, we are quite happy with the way how things have progressed. To your point on any impact of reserving, et cetera, et cetera, again, we will keep stressing on the fact that there has been no change in any of our actuarial assumptions. And therefore, to that extent, it is not that we have done anything specific, whether it was in the context of last year or even for the matter of fact, when you look at the numbers from a current year perspective. So that's in response to the third one. And on the second one, I will -- maybe Sanjeev...

Yes, I will just -- so on the motor part, clearly, first up, we are extremely excited with the positive environment that has got created. As I was giving the briefing, the quarter 3 numbers the growth in number of vehicles across private car, 2-wheeler as well as CV, which was -- which has been more than 19%, the highest in last 12 quarters is a very, very good sign. This increase in number has also come with the GST rationalization, which made the vehicles cheaper. And with that coming through, we had to also realign what is required. And we also spoke about in terms of how the combined for the market has moved in motor from 124%, which was hard enough to 128%. So the realignment was a very key piece, which is what we as an organization has done. Consequent to this, what we are seeing is the growth of December, in particular, where we have exceeded the market expectations. We remain very positively driven overall as to what motor holds for us. We've closed the year with a 10.7% market share, probably a loss of 0.4% or thereabouts as to what we had 9 months. But as we close the positivity with which we expect even Q4 numbers to build up on the new sales would drive growth for us because that is the combination, which we are probably best at. Overall, from an environment standpoint, we do see consumption playing a big role. And in that, of course, mobility of a 2-wheeler customer seeking private car and thereabout also is becoming very clear. Also one more point which augur well for us is we've been a distribution-led company, and the growth is broad-based, which is where we're seeing that beyond Tier 3 and above where the market growth also is coming. It again is a bit positive for us, and it will help us to drive what we want to drive as an agenda. So we are overall on motor, very positively placed, but the realignment in wake of what the intensity is seen is something which is warranted, and we've always maintained that we'll never shy away from taking those calls. But a range bound 10.7% market share where we stand, we are pretty much involved as a #1 player, as a top most player, we are also very aware of the responsibility that we carry in the motor segment in particular.

Your next question comes from the line of Sanketh Godha from Avendus Spark.

See, the retail health growth 85 or 86-odd percentage in the third quarter, honestly, it has the unwinding portion of last year, too. So if I do end-to-end comparison, which is more like-to-like, so can you just spell out the growth, how the retail health has panned out if you look on an end-to-end basis?

Sanketh, we are not separately calling that out. So honestly, to that extent, I think what we would say is that what we are very excited is what I think Sanjeev responded even on motor. I think the underlying demand on ground is kind of pretty much playing out consequent to some of the rationalizations that have happened in the context of GST that we have kind of talked about even in the last quarter. And hence, to that extent, one would say that the growth is very, very exciting. And hence, to that extent, while it does have an impact, but honestly, our sense is, I think broadly, even if I were to kind of give a number even on an n basis, I think that growth will be more or less around the same range of between 80% to 85%. So hence, it doesn't kind of change much, which is what we have said. What we are very, very excited is more the underlying demand momentum than looking at numbers, whether on an n basis or a 1/n basis.

Yes. And also, we're talking about -- if you look at the numbers, we have grown on 80% plus in all 3 months, October, November and December. So very clearly, the need for differentiating that and talking as it is, it's not an easy commentary. We're talking 1/n by n for you to listen on audio itself is a challenge. I can tell you, probably you can make more sense when you have the script in hand. But this growth and what we have been doing over a sustained quarter also is reflected in the market share, which has increased to 4.5% in Q3, which is -- which clearly speaks about the underlying momentum that the team has been able to build. And if your question is, do you see this momentum probably playing out even in quarter 4, my answer would be every reason to believe and it's again driven by a very good demand across markets. So there is a play and we have a product and we have a team which is capable of driving this transition. If you had asked at the beginning of the year, did we expect 4.5% kind of market share, my answer would have been probably it would have been a shade lower than that. So there is tailwind, which is also helping us look better than what we could have been. But would we have been far -- probably would have been 4%. So it's pretty much there, and we are well set. So we are at the right place at the right time as far as health is concerned.

Sanjeev, this -- I mean, honestly, this growth is a little extraordinary even if I look at from the industry standard point of view. Is it any particular channel or you which were not present in a particular channel now exploring the channel has contributed to the growth?

That I can explain to you. That I can explain Sanketh. That's what your question was. So see, the product Elevate was launched last year, July, okay? So we had started doing well in that, and that renewal base also comes and gets added to the book. So mathematically, plus supported by the tailwind, there is an answer to that part. I mean I'm definitely not saying that 85% of the growth that will continue over quarters and quarters. So mathematically speaking, the retention of a product and the quality product is there, then you get good customers and the retention also is very high. And so there is that part which is helping us to drive this kind of a growth, Sanketh.

Understood. But any new channel which contributed like maybe you were not present in one part?

Of course, our agency channel has opened up significantly, and we're able to attract a lot more channels. So agency is driving this growth. But at the same time, even on website. So we've been pretty across channels, but the contribution percentage per se of what was there would not have gone through a significant change if you look at the distribution pattern. So we are seeing this growth across channels, Sanketh.

Sanjeev, the reason I'm asking is that...

And even banca for that matter.

Understood. Understood. The reason I'm asking this question is that is our payout structure to the distributor is more skewed on n basis rather than 1/n basis and given the...

No, no, no, no. We have absolute clarity that even if it's long term, what we will do is what comes with 1/n. As a team for us, we continue to operate strictly on those guidelines, Sanketh.

Okay. Understood. Sir basically, commission payout are also on 1/n basis?

Yes. On that, yes.

Okay. Understood.

So it would be differentiated to that extent that one first year would be something and then second and third year. That obviously is the case, but it is distributed basis.

Understood. If I squeeze in one more, sorry.

Sorry to interrupt, Sanketh may we request you to return to the queue for follow-up questions as there are several other participants waiting for their turn.

Yes, sure.

Our next question comes from the line of Prayesh Jain from Motilal Oswal.

I have a couple of questions. Just a couple of questions. Firstly, on the motor side, Sanjeev, we've seen tremendous growth in volumes. And what I've understood is there is premiumization trends as well. In spite of that, the premium growth for the industry has a decent gap between the volume growth of the industry as well as the premium growth what we have seen, right? So in that sense, what is causing that disparity? And have you seen any further pricing aggression in Q3 with respect to motor OD premiums given that it was anticipated that the growth would be there and the competition intensity increase? That's my first question. And second question is in terms of retail health, could you give us some qualitative or some numbers around as to what is the kind of growth that is driving the new customers that are coming? What are they coming at? What kind of sum assured they are coming? And also the existing customers, are they scaling up the sum assured and maintaining the premium levels? Or what's the kind of trajectory that we are seeing there?

Yes. Okay. So on the motor side, Prayesh, clearly, if you see the growth has been broad-based, and you've seen small cars, the small hatchback cars being sold far higher than any other car. So the volume growth may not necessarily translate into equivalent growth in premium for the industry. And also what has to be noted is that this growth also is fueled by the rationalization, which happened from 28% to 18%, which itself led to an impact on the yield per vehicle going down. So it's a combined thing, and that is where the realignment also had to be done by us as a team to ensure that what we pick up overall from the market with respect to our own motor portfolio. And also, we spoke about how the H1 is seeing the combined ratio getting. That's to answer the competitive intensity that you're speaking about, the motor combined is 124.5% and thereabouts had very little room to go further down. It moved down to 128%. And if that is the kind of development that comes in. There is no reason to believe that the competition intensity has gone down and at the same time, you spoke about specific players coming and coming out. Frankly speaking, our journey is very secular. We've got a decent understanding and we back ourselves in terms of what we are picking up and what we do -- want to do in this motor segment in particular. We are -- and we have always maintained that we are very comfortable walking away what is not making basic sense on the ROE level for motor as a book. So we do understand we are willing to play the game if there's an ROE that comes through, even if it's on an elevated combined, but not in a random manner where we just keep acquiring because there's an opportunity available. So that kind of a discipline is what drives us. And that's why when the industry has moved from 124% to 128%. Our combined actually improved by some percentage and some few more basis points in that H1 period also. So it's to be taken in collaboration while maintaining market leadership. So further pricing aggression, very little room, but we maintained that over the last couple of quarters, but we are very unfazed because our journey of how we can slice and dice and do what makes sense for us, we would back ourselves and we are very confident that we'll be able to deliver what is warranted for us as a company. Is that, Prayesh, I hope this answers what you're seeking on motor.

Just one thing on this, Sanjeev.

I know [ TPI ] is another part which I must add to say, which has made the yield look what it is. We have been always expecting it, but it's not come through as yet.

Okay. Just one thing on that motor before you kind of answered the retail health. The hatchbacks and the smaller cars, would you say that given a lot of them could be the first-time buyers, structurally and given you have a large history of -- long history of data on the same kind of vehicles being sold on the first-time buyers, would you say that the loss ratios could be higher on this segment going ahead?

Of course, Prayesh, we can discuss in detail, but the long answer, I'll make it short and say the cars have also started coming with much better safety features. The road also has changed. So there is a lot more the challan systems are getting digitized, the overlay in terms of investigating what's gone wrong because there are cameras everywhere across the country, the surveillance has increased. So there's a lot more pluses. There are a lot more minuses. I'm not saying it. And these are all the factors that we are able to use to drive what we want to drive as a team, and that's the USP that we carry, right? So we would be too fazed by it. And if we do see segment going out of hand, I think our ability to take a call probably ahead of the market is what differentiates us as a team. I hope, again, I'm able to put across what I'm saying, Prayesh.

Yes, absolutely.

And on the retail health, clearly, we have seen far more awareness. I think this GST cut besides, of course, making it more affordable has been the biggest marketing to make the individuals and their families to realize that health insurance is critical. And as a trend, to be very honest, we do see some insured increasing significantly. We see bulk of our customers in the range of INR 7.5 lakhs to INR 10 lakhs sum insured, so which is a big positive. Also to just share with all of you, whenever a customer picks up a higher sum insured, the ability to retain and be with us is much higher because the quality of the customer is much better. So yes, it's a big plus for us as a company.

Your next question comes from the line of Avinash Singh from Emkay Global.

So a couple of questions. The first one is looking at the impact of 1/n in terms of combined ratios, is it kind of a fair assumption that your multiyear product has seen a very, very strong growth. If you can sort of provide some color, I mean, within your retail health, what is the multiyear premium share? So that's one. Second, kind of that now we are kind of have seen 9, 10 months of the year. So for FY '27, if I have missed, I don't know, you can provide some kind of guidance on growth as well as on combined. And related partly, in motor third-party should we expect by the time of Q4 some reserve releases given that -- I mean, where your reserving are sitting or kind of reserve releases in FY '22 to '24 is still pretty minimal. So is it kind of fair to assume that, okay, the Q4 should see some motor TP reserve releases?

Yes. So Avinash, I think I'll go it on the reverse way. So motor third party, I think, obviously, yes, I think as an industry, we all have been kind of waiting for the price announcement. So we'll wait and see by the time we announce results for the next quarter, hopefully, we will see where we land. So we will keep all of you updated on that. On the second piece on what is it that we can expect for the next year? I think this is something that we had spoken even as in last quarter as in to say that I think given the strong growth momentum that we see kind of getting rebound back to us, what we have always maintained is at a top line or from a growth standpoint, we have tried to see if we can be 100 to 200 basis points at a company level better than the industry growth numbers. This is cutting across all lines, and that is exactly what possibly you would have seen getting exhibited in quarter 3 for us in terms of where we -- our growth were vis-a-vis the industry growth. And even more specifically, if you would have seen even for the month of December, I think we have had an outperformance vis-a-vis the overall industry numbers. So therefore, that's something that we would endeavor even as we head into given the strong growth momentum that one is seeing on ground. And hence, to that extent, that is what we would kind of pencil in, in terms of trying to continue to gain incremental market share. On combined, more important than the combined, I think what we have largely spoken is to try and see if we can continue to sustain delivering ROEs in that range of 18% to 20%, even if you would have seen the numbers for the 9 months, it's been roughly around 19% thereabout. So hence, to that extent, in that range of 18% to 20%. So that's something that is what we would look forward again when you look at how we would want to play out even for the next year from an ROE standpoint. To your first point, I think it is a high single-digit number in terms of the proportion of long-term premiums vis-a-vis the total premium that we underwrite. But I think the only thing that we would keep urging is, I think even as I was reading the transcript, I did realize there are so many numbers on an n and on a 1/n basis across various parameters. So hence, to that extent, if you ask us, ideally on a -- this will actually kind of continue for even maybe for the next 3 quarters because while quarter 3 of this year onwards, now everything is on a 1/n, but still there will always be a factor of the first question that was being asked in terms of what is the impact of accrued of last year in this quarter and so on and so forth. So hence, to that extent, a far better reflection is to keep looking at numbers on an n basis. And there, if you would have seen our combined for quarter 3 has actually been better. I think if you look at quarter 3 of last year, our combined was roughly about 102.3%. And this number on an n basis for quarter 3 of the current year is...

So Gopal, there, I just want to interject and make this point. And we had said that also when Mayank came in, as a company, we don't want to confuse at any point of time, economic value to accounting. We are very clear. So we have -- in all our conversations with the team and key personnels who are involved, we only discuss on n basis because that is the true value which will get embedded in the company. What comes because of the accounting part is just an outcome for us, and that is the real value that we can add. Even our budget for that matter, which we have to share, are all taken on n basis because that's how portfolio can be picked up in the right manner and even cash flows can get generated. Otherwise, the tendency to make it shorter and shorter would erode value over long term.

Our next question comes from the line of Nidhesh from Investec.

Sir, can you share the share of new in the motor segment? What is the new one and what is old vehicles? I'm trying to understand whether the market share trends are more -- the market share trends, how they are shaping up in both these segments? Are we -- have we lost market share in the new side that is reflecting into lower growth or it's in both segments, our market share trends are broadly similar?

So Nidhesh, just for the benefit of all of you, I'll give you 2 numbers. One is in terms of mix for quarter 3, new is roughly about 35%, renewal is about 65%. And if you see these numbers for 9 months, new is about 33% and renewal book is about 67%. So in that sense, relatively for quarter 3, the mix is about 35% and 65%. But more important than the mix, if you ask us, I think the point that we have been talking about, given the underlying growth momentum playing out with respect to new vehicle sales, they are again in the same order as I will give you Q3 numbers first. Our new growth has been 12.4% and our old growth has been 7.7%, translating to an overall growth in quarter 3 in motor for us kind of about 9.3%. These same numbers, if you look at it on a 9-month basis, the new growth was -- has been 2.5%. The renewal growth has been 6.2%, translating to an overall growth of 5%. So this is exactly the point that we have been talking about. I think what we are seeing is clearly an underlying strong growth momentum coming in with respect to new vehicle sales. Having said that, that does not mean that for us, renewals/retentions are not important. I think that's equally very, very important. But what we have been able to leverage is a combination of both the underlying growth momentum with respect to new vehicle sales and then, of course, the continued focus on improving retention as well.

Yes, absolutely. And the fact that the 9-month average is -- when we talk about new is 2.5% and old is 6.2%, while for the Q3, the number goes the other way where the new one is -- the growth has been led by new. And as in the past, Gopal has been briefing you all, new has its own set of expenses that comes, but a better loss ratio. And that consequent to that, it will have its impact, but will have a long-term value creation for us as a company. In the past, for the quarters that we've done, always it was driven by old growth. If you go back to our scripts that we have said, we have said our growth is driven by old. So that's a big transition. It's a big plus overall for us. And we have been able to obviously garner more new in the market, which has helped us to get this kind of a growth.

Sure. Secondly, if you can share the loss ratio in health segment-wise?

I was just waiting for somebody would ask for it. But anyway, so on group health, I'll first give the quarter 3 numbers and then the 9-month numbers. First, I'll give you the Q3 and 9-month numbers for last year. Group health last year was about 97.2% and this number for 9 months of last year was 97.7%. The same group health numbers for quarter 3 this year was 90.7% and 9-month numbers is 93.2%. For retail indemnity, that's an other number that generally gets asked for. This, again, quarter 3 last year, retail indemnity loss ratio was 65%. This number 9 months was 69.1%. For the current year quarter 3, retail indemnity loss ratios are 63.1%, 9-month loss ratio numbers of 67.3%. So again, if you look at what we have been telling the market is on corporate health or group health, generally, we have maintained that we are quite comfortable running at the book with a mid-90s. That's being -- that's the threshold that we have spoken about on the corporate health, and that's exactly how it has played out on a 9-month basis. And even retail health I think the range that we have generally spoken to the market is to see if we are able to run the book at a range between 65% to 70%. I think what we are quite excited with is the way how the growth in the book has played out and the fact that we have kind of largely seen maybe a couple of renewal cycles play through on the new product that we kind of launched last year. I think the good news is I think the experience that you are seeing on ground, I think is kind of pretty much holding on to the assumptions that we had kind of penciled in when we kind of launched this. So those are the 2 numbers that I would kind of give away to all of you.

Sure, sir. And lastly, sir, on the health side, we are showing very strong growth. But from a longer-term perspective, how should we -- how do we plan to manage the issue of old lives getting subsidized by the new lives and that lead to loss ratio deteriorating over a long period of time. Currently, we are still a young company on the health side. But as the growth matures, let's say, 5 years down the line, how -- what is the strategy to manage the overall loss ratio?

So 2, 3 data points. One is that the penetration of retail health in the country overall is 5%, okay? Most of us end up looking at group health as a fungible thing for a retail cover that awareness is building up. And there's a long play available and it is also linked to the purchasing power if we believe that the GDP growth, the purchasing power, the income tax curve, the GST all are living this. There's a significant road available there. The growth of new to the insurance or new to protection will keep seeing a significant traction. And also as loss ratio picks up, which is very real and you are absolutely spot on. But at the same time, the expense and the commission of acquisition also goes down. So there is a counter play that comes in. And the aging book in terms of how it evolves and develops better medical solutioning, all of that what comes into play. We can talk about that when we meet again, but there is a play available, and that's why we see a future as we go about it. And there is -- of course -- and just to add to it, there is a good preventive play that will also become a critical factor for each one of us in our life. So if there was a -- and as a company, we would be very actively involved. There's so much more available and through I'll take care, which has got good traction. In real terms, we do believe that we will play a significant role. Right now, it's all selling the policy and admission is how we interact, but that also is progressively changing. There is a good highway available. And it's not that sitting in our room, we don't play out and simulate as to how this portfolio will behave 2 years, 3 years, 5 years down the line. These are part of actual actuarial modeling, and we are well aware of it.

Your next question comes from the line of Swarnab Mukherjee from B&K Securities.

A couple of questions from my side. First, on the commission, our commission number that has increased sequentially quite substantially because I just wanted to understand that whether this is primarily due to our retail products increasing in the mix or whether you are seeing even in commercial lines where you source through maybe agents or brokers that there has been an increase in commission. So some color on what you are seeing on the ground? And just because it's also fairly topical that we are hearing about some regulatory scrutiny on this side. So how do you see the regulatory landscape playing out? So that is the first one. And secondly, on the group employer employee, I mean, so as you said that the loss ratio numbers look fairly encouraging. So just wanted to understand that this loss ratio outcome, is this more a pricing-led outcome? Or is this that the claims environment has become benign, which is why we are seeing this? And our growth, is this like also a function of the base effect because last year, I think we were not growing this business. So is that playing out? Or have you become fairly more constructive on this business than you were earlier? These will be my 2 questions.

Okay. Too many things into 2 questions. So you got these 2 questions [indiscernible]. We will obviously try and address all of them. So on the first one, Swarnab, I think, again, this is something that we always call out. And this is what even Sanjeev just at the end responded to one of the questions. See, our business has to be fundamentally looked at in the context of loss experience and cost of acquisition. So therefore, to that extent, there are always nuances that play out in terms of what mix of business that you write. Relatively, I think the earlier question that was asked in terms of the mix between new and renewal in terms of motor. And when I kind of gave out the data points, clearly, you would have seen that the proportion of new was much higher, particularly when you looked at the quarter 3 numbers vis-a-vis what we had seen for the whole of 9 months. And new inherently kind of comes with a high cost of acquisition. And hence, to that extent, obviously, and more importantly, if you would have seen, generally, quarter 3 is typically a period of seasons and more so on retail. So hence, any quarter 3 you go back, you'll always find the cost of acquisition to be relatively higher than, let's say, what you would have seen for other quarters. So there's obviously an element of seasonality that plays out when you look at the commission numbers on an isolated basis. But what we would keep saying is to keep looking at it more on ideally the overall combined ratio, which for us actually has dropped when you look at the H1 numbers relative to the industry adverse that has happened. But -- and the second number that we keep talking about is more on the overall expenses of management. So even after considering the impact of the wage code that I spoke about of roughly about INR 55 crores, as at 9 months, I think we are kind of pretty much there insofar as the limits that are laid down by the regulatory guidelines. So hence, to that extent, that's the way we would kind of look at -- I think we are very, very conscious of what we kind of source and very, very conscious of what loss experience and the cost of acquisition that comes as a part of it. To the second point on the regulatory evolution on this, I think, honestly, we all have to kind of wait and see how it plays out. I think the good news is, I think from a regulatory standpoint, the regulator has been kind of instituting the right set of guidelines for the industry. I think a couple of years back, when they kind of introduced this overall threshold on expense of management, that was a step in the very right direction of making sure that all companies, all costs put together are well within that threshold of 30%. And if you look at basis public disclosures, roughly, there are still maybe almost 21 out of 34 players are maybe possibly met the norms. There are still a lot of list of companies which are still in exceedance on the expense of management. So honestly, I think what we would want to see from a market standpoint is to make sure that every player in the market stays within the limit on expense of management. And then honestly, we will wait for any subsequent changes that comes from regulatory changes. But we will be equally kind of committed to whatever the guidelines that the regulator lays down. So that's in response to the first point on both commission increase and what could happen in terms of regulatory change. To your second point on the GHI, yes, it's a combination of both. I think, again, this is something that we have articulated not only in the context of GHI. In general, I think what we have stayed focused on every line is to see how we can remain profitable. And the very fact that the loss numbers that I gave out is a testimony to the fact that we have been very, very careful and selective in terms of what risk do we want to underwrite. Equally, it's obviously a combination of both the points that you made. It's a combination of, let's say, a better price in terms of what we are comfortable underwriting. And two, we have our own in-house claims management team. I think they do a brilliant job in terms of making sure that once the group health account is underwritten, how is it that we can play a very, very important role in managing the overall loss experience and at the same time, giving delight in so far as customer experience is concerned, which is again reflective of the NPS scores that we have kind of called out, whether it is motor or whether it is health. So that's how the growth has been reflected. And again, we will continue to see that play out even as we head into quarter 4 or even for the matter of fact, the next financial year.

Right, sir. Understood. just on the first question, I wanted to also check on the commercial line side. So is there any kind of like for where you have intermediate so the deal has been a commission inflation? Anything [indiscernible].

Honestly, commercial lines in general, I think, has been -- if you remember, I think what we have [indiscernible] commercial lines, we have generally -- we have our own relationship team, which acts as a direct interface insofar as working with corporates are concerned. And hence, to that extent, obviously, relatively, that cost of sourcing tends to be very, very low. But at the same time, what we also write as a part of the commercial lines is some of the SME risk, which is -- which tends to be relatively widely distributed. And then there will be an element of cost of distribution. But overall, the point that I made, when you look at the loss experience plus the cost of acquisition put together, on the commercial lines book, that's a very, very profitable book for us. And that's the way how we look at it, again, rather than looking at one element of the business that we source.

We will take the last question from the line of Nischint Chawathe from Kotak.

You have a very impressive growth in retail health, and we can see an improvement in retail loss ratios as well. But as we understand, typically, the loss ratios in retail products are significantly lower in the first 2, 3 years and then they kind of move up from there on. So I would have kind of said that this delta is because of the portfolio mix. Is it something that the new policies that are originated are ported or they are originated under different covenants? Or is the -- as a cohort level profitability stable or improving or deteriorating, if you could give some color on that?

So Nischint, again, I think I'll kind of maintain the same response that I gave to the earlier question, which is I think the loss ratio range on retail health as a company that we are comfortable running at is between 65% to 70%. So that's a number that we will keep looking for in terms of how we are able to stay within that. To a large part of -- in terms of sourcing, I think, honestly, what we want to do is in line with, let's say, some of the discussions that even the government has been doing to kind of increase health care or increase health care penetration consequent to some of the reforms that they have done is to kind of improve penetration at large. So hence, I think where we are kind of largely expanding our distribution reach, which is what we put out also as a part of the opening transcript to say that even on health, we do -- we are seeing, let's say, an increase in Tier 2, Tier 3 cities kind of contributing. And these are, as we said, new to insurance. So hence, to that extent, I think so far as we are concerned, we would want to kind of continue to expand by acquiring a lot many more new to insurance customers. And two and more importantly, the earlier point that I said in terms of our ability to continue to retain our own customers is something that we are very much focused on. So it will be a combination of those 2 is what will continue to drive growth in the retail health book.

And Nischint, just to add to what Gopal is saying, see, we've also transformed our own journey, right? And we are a multiline, multiproduct company. For us, whether the customer comes from the route of motor or from health, we are seeing it from a comprehensive one-stop solution. We were underbought in our offering for a number of years as far as retail health is concerned. And we know that going in as we move along, while we all know that the loss ratios move upward as we age, and that's the truth, which I don't see would change. But at the same time, we also know if we are comprehensively dealing with this customer, the motor loss ratio also goes down. I mean, just to share with you. So it's a very clear mix, and we are very well placed as a multiproduct, multi-line company. So what we are seeing is getting a good customer on board and then working with them on a lifetime profitability. So the math is what plays out vis-a-vis what you see because at times, you will see only health, at times you will see only motor. But what we look at it is in a far more comprehensive offering. And with a 2.9% market share, which was just probably 18 months back for us to be at 4%, 4.5%, where we stand as we exit quarter 3, it is just helping us to build a very well-rounded practice. I'm not saying it was not well grounded, but health in particular, was always in our space, which was driven by GHI and underbought on this part. We see this as a toggling part, and we see it as a very significant play in our scheme of things. That's why we've got invested and we stay positive. And in our business, it's always possible that 1 or 2 lines will have a problem and COVID happened, health was all over the place, but motor kind of saved the day for us. So that's the way the portfolio gets balanced, and that's where we end up talking about what is it that we can generate as an ROE. Yes.

Got it. That's very comprehensive. Just squeezing in a last one. I'm not sure if you mentioned this, but in case of health, there is the input tax credit loss because of GST exemption. So how are you dealing with that? Are you sharing it with the distributors? Or are you absorbing it? Is that one of the drivers for higher expense ratios?

So clearly, yes, we will have to realign our cost structure, and this is what we have done. The benefit in totality of GST rationalization has got passed on to the customers. And we had the benefit of -- as the volume grows for us, in every line of business, motor or health, economies of scale will kick in. We have a large health practice as a company, which is in combined from the employer employee as well as retail health. So definitely, we'll do what is it required to rationalize it and serve the customer appropriately, yes.

Are you sharing it with the distributor or... I mean is it something that...

Yes, of course, we have -- the industry has shared. It's not only about us. All of us on the general insurance and the retail health have -- and then the increased volume is not impacting the income of the distributor per se. So there is already a counterplay which is visible which can be seen in terms of the growth. So it's not that it's one channel which is getting impacted. Comprehensively, we are all able to do better business. So yes, it's got passed on. We have also rationalized our cost structure because both part is required and today's technology and the -- so much which is going on, which we have not spoken, but we can talk about it when we sit 1 to 1 is helping us also to reduce cost per transaction. I don't know when you see the script, which I spoke about as to how we've been able to use bots to get our digital part of serving DIY serving significantly up vis-a-vis the operator handling it, which is driven by a lot more inconsistency and time consumption, which can happen. So there is so much that is happening. So the cost part will go down. So we will be able to manage it on this front very easily.

That is very reassuring.

Thank you so much for joining. Thank you, and have a great 2026. Thank you so much.

Thank you.

Thank you. On behalf of ICICI Lombard General Insurance Company Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.

Thank you.