ICICI Lombard General Insurance Company Limited (ICICIGI) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. A very warm welcome to ICICI Lombard General Insurance Company Limited's Q1 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 Business; Mr. Girish Nayak, Chief Technology and Health Underwriting and claims; Mr. Sandeep Goradia, Chief Corporate Solutions, International, Bancassurance and Mr. Gaurav Arora, Chief Reinsurance Underwriting and claims for Property and Casualty. Please note that any statements comments are made in today's call that may look like forward-looking statements are based on 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.

Thank you so much. Good evening to each one of you. Thank you for joining the earnings conference call of ICICI Lombard General Insurance Company for Quarter 1, 2026. Let me give you a brief overview of the trends you observed in the economy as well as our industry followed by an overview of the business. Post this our CFO, Mr. Gopal Balachandran, will share the financial performance of the company for the quarter ended June 30, 2025. India's GDP growth for quarter 4 financial year 2025 surprised positively at 7.4%. And the full year growth came in at 6.5% according to the data released by MoSPI. Key macroeconomic indicators, such as GST collections and performance of infrastructure sector indicates some positive momentum for quarter 1 financial year 2026. RBI has cut in the repo rate by 50 basis points in early June 2025, income tax incentives by government and benign inflation is expected to augur well for the domestic economy. Let me now dwell on certain industry trends, which can have an impact on the GI industry at large. In the current quarter, the government's continued emphasis on infrastructure deployment has fueled growth across key sectors such as cement, steel, infrastructure and capital goods. With the banking sector remaining healthy and capacity utilization exceeding historical norms, any increase in domestic demand could serve as a catalyst for private capital expenditure. These factors present a positive outlook for the commercial line of business in coming quarters. In quarter 1, 2026, as per the data published by CM, private car and 2-wheeler segment degrew by 1.5% and 7.2% Y-o-Y, respectively. However, in quarter 1 financial year 2026, basis the data published by FADA, auto industry has grown by 4.9%. The private car segment grew by 2.6%, registering 0.97 million unit in sales. The 2-wheeler segment has been seen a modest growth of 5% contributed by both urban and rural consumers. As the monsoon is forecasted to be normal, we anticipate that it will further fuel the rural demand. Commercial vehicle has seen a growth of 7%, which was led by strong growth in electric 3-wheeler category. As an organization, we remain optimistic for the motor business in coming months. The Health segment remains the largest contributor to the industry, accounting for 40.2% of the GDPI mix in quarter 1, 2026. Rising hiring activity, escalating medical cost and sustained credit growth are the key drivers fueling continued demand for health insurance. However, the overall industry growth trajectory continues to be moderated by the impact of the 1/n accounting norm. Despite this, the fundamentals of the health insurance segment remains strong positioning it as a critical pillar of long-term industry growth. Given the favorable economic indicators and positive regulatory environment, we expect the general insurance industry to continue the growth momentum in medium to long term. However, we remain vigilant on the ongoing geopolitical developments, which may pose risk to both global growth and Indian economy. Let me now share an update on key industry level events. Happy to share that recently launched campaign, "Achha Kiya Insurance Liya" is a commendable step by the general insurance industry towards enhancing awareness and consequently increasing insurance penetration across diverse customer segments. This unified effort reflects the sector's growing commitment to driving financial protection and resilience in India. As one of the leading players in this industry, ICICI Lombard is well placed to contribute and benefit from the same. Another key event where in the country was deeply affected was a tragic Air India plane crash. We extend our sincere condolences to the families who lost their loved one. An event of this magnitude can have profound effect on all those involved. As an industry and as an insurer, we responded swiftly, prioritizing and supporting the affected family members and other stakeholders during these difficult times. Now coming to the industry performance for quarter 1 financial year 2026. The GDPI grew by 8.8% for quarter 1 2026. Excluding the impact of the 1/n accounting norm, the GDPI grew by 12.8% for quarter 1, 2026. Excluding crop and mass health, the GDPI grew by 11.1% for quarter 1 2026. Speaking on the specific segments within the industry, the commercial segment reported a growth of 13% for the period ending quarter 1 financial year 2026. The growth is majorly driven by improved pricing in property lines of business. The Motor segment growth for the industry stood at 8.7% for the period quarter 1, 2026. The industry continues to witness significant pricing pressure as reflected by higher industry combined ratio for the motor line of business. The health segment, including mass health, grew by 8.1% for the period quarter 1 2026. Within this, the group health line of business grew by 9.6% for quarter 1, whereas the retail health growth stood at 9.4% for quarter 1 2026, impacted by the 1/n accounting norm. Speaking on the underwriting performance of the industry. Overall, the combined ratio for the industry worsened to 112.6% for financial year 2025 as against 112% for financial year 2024. The overall combined ratio for private players worsened to 111.4% for financial year 2025 from 108.7% for financial year 2024. Industry combined worsening was largely due to motor line of business. It stood at 123.7% for financial year 2025 vis-a-vis 118.5% for financial year 2024. As against this, our continued focus on driving profitable growth has helped us to show a combined ratio of 102.8% for financial year 2025 versus 103.3% for financial year 2024. Also, it is pertinent to note that the company's contribution to overall underwriting losses is at 2.7% only vis-a-vis an 8.7% market share for financial year 2025. I will now speak about the company's performance across key business in quarter 1 financial year 2026. The company's GDP registered a growth of 0.6% as against the industry growth of 8.8% for quarter 1 2026. Excluding crop and mass health, the company's growth was at 3.4% compared to the industry growth of 11.1% for quarter 1 2026. In the Commercial Lines segment, our growth stood at 6.8% for quarter 1 2026 as against the industry growth of 13% for the same period. Whilst the industry has seen an improvement in pricing at an overall level. However, there have been different levels of price action within subcategories of commercial lines. We continue to drive profitability through prudent risk selection and distribution-led growth. We have maintained a leadership position in engineering and marine cargo line of business. In the motor segment, our growth stood at 3.2% for quarter 1 2026 as against the industry growth of 8.7%. In the backdrop of elevated competitive intensity, as stated earlier, we continue to drive our strategy in motor insurance based on granular portfolio segmentation and distribution expansion. We continue to maintain our leadership position with a market share of 10.5% for quarter 1 2026. Our portfolio mix for private car, 2-wheeler and commercial vehicles stood at 54.8%, 27% and 18.2%, respectively, in comparison to the mix of quarter 1 2025, which stood at 51.5%, 26% and 22.5%, respectively. In health segment, we grew by 1.9% for quarter 1 2026 as against the industry growth of 8.1% as at quarter 1 2026 on a 1/n basis. Our retail health business line continued to maintain the growth momentum pursuant to which we have gained the market share. We registered a growth of 32.2% as against industry growth of 9.4% as at quarter 1, 2026. The continued innovation in retail health products and investment in retail health distribution has helped us to increase market share, which now stands at 3.5% for quarter 1 2026 as against 2.9% for quarter 1 2025. Our group health segment degrew by 2.5% for quarter 1 2026 when compared with quarter 1 2025, resulting in our market share being at 10.1%. This was essentially attributable to lower growth in our Group Benefits segment due to muted credit disbursement, coupled with impact of 1/n accounting norms. Would now like to apprise you of other key initiatives of our organization. The initiatives under One IL One Team continue to deliver measurable results, underscoring our commitment to sustainable and profitable growth at the organization level. A key initiative in this journey has been the consolidation of our customer-facing call center into a unified One IL One call center aimed at standardizing practices, enhancing operational efficiencies and delivering a superior customer experience through strategic technology intervention. The integration of process under this initiative resulted in a 78% increase in productivity for quarter 1 2026, along with reduction in headcounts of the fresh acquisition team and service team at 22% and 10%, respectively. Our digital service engagement has gone up to 38% in quarter 1 2026, up from 22% in quarter 1 2025. This was made possible through use of artificial intelligence, voice bot, propensity modeling and targeted campaigns. We further improved our efficiency in motor claims. Our preferred partner network serviced 74.6% of our non-OEM claims in quarter 1, 2026, up from 72% in quarter 1 2025. Launched in April of 2024, our IL Sahayak initiative has strengthened on-ground claim support for our health customers. In quarter 1, 2026, the initiative assisted over 28,000 customers, reflecting an increase from 8,000 customers supported in quarter 1 of 2025. This growth highlights our continued focus on enhancing the customer experience and delivering timely accessible support during the critical moments. Our digital platform continues to aid our growth with visitors increasing 21% year-on-year and increase in fresh business by 69% year-on-year. This is fueled by our one-stop solution IL TakeCare app for all insurance and wellness needs, which surpassed 16.6 million downloads. Our focus on customer experience and process efficiency has led to an NPS of 68 and 69 for health and motor claims, respectively, for financial year 2025. We have demonstrated resilience amidst industry challenges, maintaining our focus on profitability. Guided by our One IL One Team philosophy, we continue to harness the power of data, technology and innovation to drive our progress. Our robust multiproduct multi-distribution strategy allow us to adopt swiftly and serve our customers more effectively while delivering profitable growth. I will now request Gopal to take you through the financial numbers for the recently concluded quarter.

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. We have uploaded the results presentation on our website, and you can access it as we walk you through the performance numbers. With effect from October 1, 2024, long-term products are accounted on a one-by-end basis as mandated by IRDAI. Hence, Q1 FY '26 numbers are not comparable with prior periods. Please refer to our investor presentation for further details. The gross direct premium income of the company was INR 77.35 billion in Q1 FY '26 as against INR 76.88 billion in Q1 FY '25, a growth of 0.6% as against the industry growth of 8.8%. Excluding crop and mass health, GDPI growth of the company was 3.4% vis-a-vis the industry growth of 11.1% in Q1 FY '26. Our GDPI growth during the quarter was primarily driven by growth in the preferred segments. The overall GDPI of our Property and Casualty segment grew by 6.8% to INR 26.77 billion in Q1 FY '26 as against INR 25.08 billion in Q1 FY '25. On the retail side of the business, the GDPI of the motor segment was at INR 24.44 billion in Q1 FY '26 as against INR 23.69 billion in Q1 FY '25, registering a growth of 3.2%. The advanced premium numbers for the motor segment was at INR 38.07 billion as at June 30, 2025, as against INR 37.17 billion as at March 31, 2025. GDPI of the health segment was at INR 23.81 billion in this quarter as against INR 23.37 billion in Q1 last year, registering a growth of 1.9%. Our agents, which include the point-of-sale distribution count, was at 143,675 as at June 30, up from 140,736. This was the number as at March 31, 2025. Our combined ratio stood at 102.9% for Q1 FY '26 as against 102.3% for Q1 FY '25. Our investment assets during the quarter rose to INR 554.53 billion as at June 30, 2025, up from INR 535.08 billion as at March 31, 2025. Our investment leverage net of borrowings remained the same at 3.74x as at June 30, 2025, and as at March 31, 2025. Investment income was at INR 12.88 billion in Q1 FY '26 as against INR 11.28 billion in Q1 FY '25. Our capital gains, net of impairment on investment assets stood at INR 3.8 billion in Q1 FY '26 compared to INR 2.84 billion in Q1 FY '25. Our profit before tax grew by 28.4% to INR 9.94 billion in Q1 FY '26 as against INR 7.74 billion in Q1 FY '25. Consequently, profit after tax grew by 28.7% to INR 7.47 billion in Q1 FY '26 as against INR 5.8 billion in Q1 FY '25. Return on average equity was at 20.5% in Q1 FY '26 as against 19.1% in Q1 FY '25. Solvency ratio was at 2.7x as at June 30, 2025, as against 2.69x as at March 31, 2025. This continues to be higher than the minimum regulatory requirement of 1.5x. As I conclude, I would like to reassure that we remain committed and focused on our strategy of innovation and driving profitable growth, consistent and sustainable value creation for all our stakeholders while continually ensuring that the interest of the industry and our policyholders is in the forefront at all times. Thank you, and we'll be open to take questions.

[Operator Instructions] First question is from Nischint Chawathe from Kotak.

My question is actually on the commercial lines of business. Somewhere at the beginning, you did mention that pricing has improved in this segment. But I think at the same time, you also said that there are different levels of pricing. And as I see, you've kind of shrunk the market share a little bit in this segment. So just curious, what is your view on this segment? And do you expect this to be a profitability accretive in this financial year?

Sure. I think, Thanks, Nischint, for your question. The simple answer is, I mean, overall, yes, with the overall sentiments in pricing getting better, we do expect it to be more profitable. If you remember, -- last year, when we were reaching out in every possible quarter, we had spoken about the excessive intensity and aggression on the pricing front. Certainly, there is a bit of a semblance overall. But we also said along with the multiple sections and competitive intensity that we have seen, what we have done is distribution-led growth, primarily because on the larger corporate side or the larger risk, still there has been some bit of an aggressive pricing, which has come in. We've done what is required to drive profitable growth for us. Your seek on do you expect it to continue? Our firm belief is, yes. And what market is doing at this point is pricing risk appropriately, which was not happening otherwise in the previous year.

So this should actually be kind of profitability accretive this year is what we are trying to say?

I mean it's very difficult to forecast. The simple answer is pricing improves, it should be better than what it is. But you know fire as a business line has to play out over quarters because it's driven by very low frequency and very high severity. But it should be -- it should be profitable overall. My answer is yes, but it will have to play out because it's driven by extreme losses as and when it happens, if it happens.

Yes, of course. The other question is on the loss ratio in the health business. If you could help us split it between the retail and the group business.

So, Nischint, I'm giving the group numbers first, which is corporate health. Q1 last year was 97.9%. This is the last year Q1, 97.9%. That number for Q1 this year is at 95.7% -- on the retail indemnity, again, similar period. Q1 last year was 72.5%. Q1 this year is 74.3%.

The next question is from Madhukar Ladha from Nuvama Wealth Management. We seem to have lost the line from Madhukar, we'll move to the next question. The next question is from Prayesh Jain from Motilal Oswal.

Yes. Just a follow-up on the loss ratio of the retail health. You mentioned it's gone up from 72.5% to 74.3%. Given that we would have had a very strong growth on the fresh premium, would you say that the severity and the frequency of retail indemnity has gone up substantially?

So Prayesh, I think if you remember, even last year, first quarter, we did kind of talk about a slight increase in incidences. So we do see that playing out even for quarter 1 of this year. So there has been definitely an increase in incidents. But as you would have seen when we -- even when we started the last year, quarter 1 number was 72.5%. But by the time we ended, if you would have seen the number on a full year basis, our retail loss ratio ended at about 67.9%. So hence and exactly to your point, I think what's helping us is the growth that we are seeing largely kind of aided by the Elevate product offering that we have been talking about. I think that continues to kind of do well. And therefore, this is just quarter 1. And our expectation is pretty much in line with the range of loss ratios that we have spoken. I think in all fairness, the expectation is that we should kind of end the year in that same loss ratio range of 65% to 70%. That's the range at which we are comfortable with. And as of now, I think things seems to be pretty much looking around within that range. This is just a quarter 1 phenomenon.

Just -- and again, the 32% growth that you have seen on the retail health, how much would you -- how much of that would be, say, portability? And how much would it be from, say, first-time customers to the industry? Can you give some qualitative comments there because that will help us understand the quality of business?

So Prayesh, in general, I think if you look at it, I think our market share has been very low, right? So I think as a company, we have had an aggregate market share of 2.9%. I think we have moved the needle, which is what we talked about, to move at about 3.5%. And the endeavor for us is to obviously kind of make sure that, again, if you remember last quarter 4, we did speak about the initiatives that we are trying to do on retaining our own customers. So therefore, in that sense, obviously, that's an area where we are actively focusing on so that we are able to kind of improve our own retention. And two, again, the objective will be to try and see if we can get more customers, particularly which are new to insurance. To your point on what could be the extent of portability, we don't separately call out that number. But I think clearly, from our standpoint, I think what we can talk about is on a relative basis, I think the proportion of what we would have seen as a rollover, whether it is quarter 1 or quarter 4 of last year vis-a-vis what we have seen in quarter 1, I think definitely that mix is lower.

Okay. And just coming back to the motor segment. What are your thoughts on motor TP price hike? Do you think that can come through?

So Prayesh, Sanjeev here, we are also as much aware as you are, there is enough and more news that we can -- we are ourselves seeing that something is expected. Has the industry made the representation? Answer is yes. But we would not have any update beyond that, but it's -- it's kind of expected. But in our working and in our thought process and in our sourcing, the way we operate, we take things as they exist at this point of time where there is no TP hike. But we must share the optimism, which is there overall that since the last 4 years almost, there's been very little that has happened on the TP side. Some increase would be a relief for the industry overall.

And just a follow-up on that. Can it happen without a care person and the regulator?

So the manner in which it gets announced is more in consultation with IRDA. So it can happen technically. But again, this is something which is beyond our ambit, and we don't want to further dwell on this. Structurally, for whatever it's known to us, it's possible. And then, Gopal, any views on this?

No, there is the only other thing that I would add, Prayesh is I think definitely, what warrants a price increase, I think this is what I think the industry has been largely looking at. As for example, again, similar to what we have been speaking, which is when we see court compensation or court award getting exhibited and the element of claim inflation that you're required to build as a part of the loss cost, definitely, there is every reason for us to believe that one should definitely seek a price change. Exactly when will it happen, how it would get notified, I think honestly, we'll have to wait for it. But there is definitely a case for the industry to seek a price increase given the fact that for the last few years, we have not necessarily seen in that sense, a meaningful price increase on third party.

The next question is from Sanketh Godha from Avendus Spark.

See, the fire growth for us has been lower compared to industry and we invariably are the market leaders after probably new in that business. So just wanted to understand that given the bulk of the business happens in first quarter in commercial lines, is it fair to say that maybe because of the pricing environment, our expected growth, which was maybe meaningfully very higher, will remain at the current levels for the full year?

Fair question, Sanketh, If it is something which you have to think in terms of trend, I believe our growth can also increase overall in coming quarters. But the bulk of the booking does happen in first quarter. To that extent, mathematically speaking, you are right. However, progressively last year, the discounting kept increasing as quarters kept happening, right? So the market kept hitting new levels of discount. So to that extent, if there is some bit of a seamless that is coming in, the industry should show further positive trend as far as Y-o-Y growth is concerned. And in line with that, we would also like to believe and back ourselves to say that we will also see that positive trend continuing. However, whether we will be able to bridge the delta that is existing in quarter 1, that our endeavor obviously is to get that managed over quarters and see that we stay where we want to be. It will be purely a function of how the pricing elements are working out in different sections, and we will take a call accordingly.

Got it. Got it, Sanjeev. And the second thing which I wanted to understand is that if I look at the motor growth based on the mix, what you disclosed in the PPT, it seems that you degrew largely in the commercial vehicles, while your growth in 2-wheelers and cars looks okay compared to overall growth. So is it largely because of the intensive competitive environment or are we recalibrating compared to what we did last year in that line of business?

No, no, Sanketh, I think you're again spot on. See, beginning of the year, again, the normal inflation and all of that comes through in our respective loss ratios that is expected to happen. And if there is no TP hike, it does make the overall math adverse. And logically speaking, the cost of acquisition to that extent should get adjusted so that the TP hike, if it's not there, still the overall math falls in place. We did realize that the market overall did not change the trajectory, and we felt to be a bit more prudent at this point of time. You are spot on, Sanketh. Yes, that's what is reflective of. It is not that we don't want to do the right thing and see CV also showing positivity, but it's purely a function of selection, which has made us come out the way we have come out in terms of outcome. But we don't want to do it, and you know that, Sanketh, at the cost of profitability.

So basically, in simple words, if there is a price hike, say, in a couple of months, then is it fair to say that you might see a pullback or a better growth in CV segment?

So the -- again, the function is -- it's a function of how the market reacts. If further suppose -- I'm just giving a scenario. The simple answer to what you said is logically, yes, it should work out what you're saying. But supposedly the market reacts again much more sharply and ends up throwing a lot more money -- in terms of acquisition, we will again end up calibrating. So logically, what you're saying should happen, but we'll have to wait until it plays out.

Got it. Got it. Perfect. And last one, crop insurance, INR 14 crores, INR 25 crores what we did last year. Today, we are doing just INR 18 crores in the current quarter, maybe timing difference. So given you mentioned in the PPT that you won a few clusters, so is it fair to say that there will be year-on-year growth in the crop business in the current year?

Year-on-year growth, difficult to envisage. See, for crop, most of the things will come up for bidding next financial year. This year, there are very few actions. So as [ Lakkur ] have it, the Maharashtra where we were already there in this year should have lasted has gone for retendering, consequent to which we had to rebid. Whether we were to match it or grow, only time will tell, but not too many opportunities at this point of time to see that we can exceed that number at least at this juncture.

The next question is from Nidhesh Jain from Investec.

So my question is on competitive intensity. So which are these players who are engaging in intense competition at this point in time? Because last time, these were mostly private sector players. But this time, if you look at the data industry data, the market share gain is happening from PSU players. So what is driving that? And how do you see that ending up? Last time, a couple of players have shown very high losses and then competitive intensity reduces for 1 year. But again, we are again seeing that competitive intensity is increasing. So how do you see this plays out? And what are the time lines, let's say, when this will taper off?

So Nidhesh, I think the way I think we would respond is, I think all of this, thankfully, is public information. Therefore, I think the market clearly knows which companies are aggressive, which companies are kind of gaining market share. So without specifically kind of getting into names, I think this is all there in the public domain. I think all that -- which is what we kind of put out as a part of the opening transcript as in to say that -- and which is what we called out even last year. I think on motor specifically, if you would have seen, honestly, there was an expectation last year for the industry to actually see an improvement in combined. which if you remember, kind of finally ended the year with a combined ratio of almost 124% for the industry as a whole compared to roughly about 118% that we had seen 1 year back. So that's how we have kind of headed into the current year. And that's also the reason why if you would have seen for us, I think relative to the industry growth in motor, which has been a single-digit number of roughly about 8% plus, our growth in motor has been 3.2%. So that's again a conscious call. Now how long can some of these players subsist elevated competitive intensity? The good news is, again, for each of the companies, there is public disclosures on their outcomes in terms of combined ratios. Some of the companies have -- while a majority of the companies, we have the full year numbers, some companies possibly could have announced numbers even for quarter 1 as we speak. So clearly, it seems to suggest that the market continues to stay competitive. At 124% plus, honestly, we don't necessarily kind of see at an aggregate level to be very -- in that sense, gaining market share. But within the segment, obviously, we will kind of grow where we think it is appropriate.

And just to add to it, as an entity, we have to show tremendous patience. If you go back in the history last year in H1, we had gained, then we kind of moderated and that kind of moderation continued. But we know that if there is this kind of intensity, which is at a very different level at this point of time, we are willing to wait it out. And we know those cycles will come where we'll have our opportunity.

Yes. The only thing is that the time difference between cycle is quite short. We are just getting 1 year of time period where the competitive intensity is okay. But again, then the new set of players keep coming in and competitive intensity increases, then -- so it's not that a 2-, 3-year period, there is an up cycle in terms of reasonable competitive intensity in the sector.

Fair point, Nidhesh, but the fact of the matter is if new players are coming, they also over long term are expecting value to be created, and that's why we are attracting new players. Suppose there are no new players coming also speaks of the fact that it's not doing enough to attract capital. Frankly speaking, my view to that, Nidhesh, is the other way around. And while we would love to have periods of 3 years, 2 years, as you mentioned, but we are very well equipped with a multi-led, multiproduct, multichannel entity to manage these kinds of variability. It's part of our day-to-day existence. So at times from an investor standpoint, when you look at it, you wonder what's happening. But as a company and you see the numbers from almost 2008 since the de-tariffing happened, the industry grew at 15% and thereabouts around that region. But we have probably grown at 13%, 13.5%, almost 1.5% lower over 2008 to 2025. But the CAGR profit growth of the industry is 10% and probably 8% to 10% and ours is almost 20%. So we back ourselves in these times also. We would love to have it the way you are saying. And this keeps us agile also. So it really doesn't worry us. But from your standpoint, maybe you've got a point.

[Operator Instructions] The next question is from Shreya Shivani from CLSA.

I have 2 questions. First is on the tragedy that you mentioned about. I just wanted to understand, has -- how much of the claims have been included in our performance this quarter, with the hull losses, have they come in this quarter or whether they're going to come in the next quarter? And I'm assuming there will also be the personal accident bit. So that can be spread over some time, I understand. But what has happened with the aviation claim that I wanted to understand. Second is on the long-term policy. So I remember when this was launched, there was a bit of confusion -- or not confusion, the entire way in which you are paying out commissions to your distributor on the long-term policy has also changed, right? It will be in that 1/3, 1/3, 1/3 format or whatever one by end format. So has the behavior of the distributor changed now that you're 6, 9 months into it? In which product segments has it changed? Are some product segments going to become 1-year product only instead of being long term because of this policy change? Some commentary around that. Those are my 2 questions.

Sure. So Shreya, on the first one, I think, again, as we have always said, I think it's very difficult to kind of comment on individual claims. I think what we can say for sure is what we have -- which is what we have been kind of telling even earlier at the time when the incident had happened. Given the exposure that we have on the risk, the impact that we have on the net, they have been completely kind of provided for. So whatever results that you see for quarter 1 factors in for the likely impact of claims because honestly, we will not know when the estimate will eventually play out. But I think it is well within our ability to kind of absorb such losses. That's primarily the business that we are in. And therefore, to that extent, I think we have been able to kind of provide for estimates. This is what we have as of 30th of June. To your second point on long-term policies, I think that's the flexibility which I think clearly the market has got. I think they have to decide in terms of how do they want to incentivize sourcing of policies. As we speak, you're right, we are into the third quarter of the change. Market still continues to exhibit differentiated behavior in terms of some of them exhibiting some of them kind of seeking upfront, some of them obviously willing to kind of take over a period of time. But if you ask us, has there been any major shift in the behavior relative to what we had seen in Q3 and Q4, the short answer is no. We have not necessarily seen any major shift.

No. So there, I'll quickly update you that, as Gopal said, in certain constructs of long term, there can be differential practice. But more so on the health side, the industry has been very unified in terms of procuring long-term products. Initially, initial quarters, we did see the long-term sourcing getting impacted for us because we had moved in line with the regulation and others had not moved. But thank God in that sense that now the practice has been uniformly addressed by each one of them. And from there on, we all see those numbers reverting back. So to that extent, it is a positive sign. And the partners are also finding an obvious benefit of doing long-term policies for the customers. Yes. So there is normalcy as far as health part of the business is concerned on the retail side.

Got it. Got it. And just on the first question, just a follow-up, sorry. How much can we say is the total combined ratio impact of that event, if there's a number?

It's baked in. And the fact that we are not calling out, otherwise, we would have called out, it is usual shares. And these are all estimates. It will 55, but it's addressed at this juncture, and we don't think it's appropriate to call out that number.

Next question is from Madhukar Ladha from Nuvama Wealth Management.

I got disconnected in between, so maybe this is a little bit of a repeat. So when you point out competitive intensity, are we seeing some let down in competitive intensity due to increased -- due to probably slightly lower commission payouts because AUM ratios remain high for a lot of private guys. And is it because of that, that the PSU guys are increasing their share? Or is it that the PSU players pricing itself is lower. So that was one question. I mean, why -- and what is your expectation given that now a considerable amount of time has passed and AUM levels still remain very high for a lot of the guys. So what is your expectation on what can happen over there?

Yes. So Madhukar, I think you are absolutely right. I think what will be a key watch will be because this will be the third year of the glide path that the regulator had announced in 2024. Even if you look at public disclosure of all the companies, which is now out for FY '25 as we speak, it's been about 50% of those companies are still yet to toe the line within the limit of 30% or 35% that the regulator has stipulated. So hence, that will be something that will be closely watched for. Clearly, if you recollect, even last year when the regulator had kind of looked at these companies, they have been asked to kind of give a clear road map every quarter in terms of what is their plan to achieve the numbers within that limit of 30% or 35%. So hence, that will be clearly a key determinant for most of the players who have not necessarily yet met the limits. What could happen in terms of the competitive intensity is, again, which is what we responded in response to one of the earlier calls, which is to say that I think players who have chosen to be very aggressive in the last 2, 3 years, I think you can clearly see basis their public disclosures, their combined ratios have got significantly impacted. And they are kind of clearly calibrating growth numbers. And hence, of course, this is market. So obviously, there are other set of players who choose to then get a bit aggressive. In entirety, when you put all of this together, which is why we called out, industry combined ratio still continues to remain elevated at 113%. And within that, motor continues to stay elevated at 124%. How long can this subsist? Honestly, honestly, we believe that you cannot continue to lose $0.25 to $1 for a very long period of time.

And also, Madhukar, we also believe that sometimes the solution you're seeking on the AUM can be worse than the problem. And that's what Gopal is talking about. You may want to chase business which comes on a lower cost of acquisition at a pricing which is very aggressive. Now clearly, if that's the solution industry seeks to manage the AUM glide path, we will let them take that call. And to be fair, it's each one do his own self on that, but we'll have to see how it plays out.

Right. Also a follow-up. See, even on health, because of the long-term policies, how has the industry sort of reacted in terms of payment of commission over there on the long-term policies? That's one part of the question. Are most people.

The answer to that is Madhukar, it's all one by end. We pay it on a yearly basis for long-term health policy.

Okay. And on renewal premiums, are we seeing some sort of reduction in commission in renewal because that was one of the expectations also given.

It is. And you are spot on. The -- definitely, there's a delta which exists between the fresh sourcing of health and the renewal. And to be fair, it's at the industry level, it's not only for ICICI Lombard.

[Operator Instructions] The next question is from Dipanjan Ghosh from Citi.

Just 2 questions. One, on the group health part, obviously, you had kind of moderated your growth trajectory from it towards the second half of last year given the competitive pressure. So I just wanted to get some sense with your base kind of normalizing from, let's say, the second half of this year, I mean, how do you see the growth in that part of the segment and the competitive intensity? Your loss ratios have also kind of improved a little bit on a Y-o-Y basis. So how do you see that segment behaving on the corporate employer employee side? And second, on the retail health portion of the business, I mean, I think this question was asked previously also, but from that calculation would suggest that loss ratios on the back book are probably kind of operating at levels, which is -- it may be a little bit higher than where the industry averages are or maybe your stated averages of around 65% to 70% steady-state run rate on the back book, I'm just talking about. So first of all, is the assumption correct? And secondly, I mean, if yes, then how do you kind of aim to recalibrate it?

So group health, Dipanjan, I think the call is pretty much similar to what we spoke about in the rest of the lines as well. Now this is a segment where even Sanjeev had spoken about, let's say, typically, you get to exhibit maybe slightly chunky premiums, but maybe comes at a very -- relatively lower cost of acquisition. So hence, competitive intensity continues to be higher on that particular segment, given the fact what I spoke about on possibly some companies wanting to write this segment of business to meet their expense of management obligation. Within that is how we have played out our growth. So we will watch for the development. In case, I think if we see signs of easing for, let's say, for companies who have to meet their AUM, then obviously, I think we are well placed to write the risk back. The good news, as we keep saying in our businesses, majority of our risks are 1-year risks. And therefore, to that extent, our ability to possibly get it back is always there with us. And on the second one, I think.

On the second one, on the retail health, it was more with respect to -- sorry, loss ratio. The loss ratio you're talking, I think Gopal has already spoken about it. We do believe that coming quarters, so this is the mix, the way it comes out and a lot of NEP that comes in, and we have seen a bit of a frequency spike here and there. But your back-end calculation is spot on, and we do believe that as a company, we would fare a lot better in coming quarters as the growth of new would start overall impacting our loss ratios positively. So your calculation is right, and we are also expecting a similar trend.

The next question is from Neeraj, who is an individual investor. Neeraj's line seems to on hold. That was the last question in queue. I would now like to hand the conference over to Mr. Sanjeev Mantri, for any closing comments.

Thank you so much for joining. I think you all had a long day back-to-back calls. There were IDFC Live then you ICICI Prudential launched ICICI Lombard. So enough and more calls. Look, I mean, we've spoken overarching what we want to focus on, and we look forward to interacting with each one of you in the course of the quarter. All the best, and take care of yourself. Thank you so much.

Thank you very much. On behalf of ICICI Lombard General Insurance Company Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.