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 Q2 and H1 FY 2027 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 Corporate, International [ Banca KRG ] and government business; Mr. Girish Nayak, Chief Enterprise AI and Technology; Mr. Sandeep Goradia, Chief Retail Business Strategy and Solutions them; Mr. Gaurav Arora, Chief Commercial Lines and [ Motor], Underwriting and Claims; and Mr. [ Girish Segal], Chief Health Underwriting and claims Customer Service. 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 expressed being expressed. [Operator Instructions]. I now hand the conference over to Mr. Sanjeev Mantri, MD and CEO, ICICI Lombard General Insurance Company Limited. Thank you, and over to you, sir.

Thank you. Good evening to each one of you. Thank you for joining the earnings conference call of ICICI Lombard for half year ended September 30. I would like to commence with an overview of the economic and industry trends, followed by our company's performance and key initiatives. Our CFO, Gopal Balachandran, will take you through the financial performance for the year ended September 30. The domestic economy continues to have its growth momentum with a GDP expanding at 7.8% year-on-year in quarter 1. Economic activity remains firm aided by private consumption, manufacturing growth and investment spending. Supportive monetary and fiscal policies help cushion the impact of the ongoing conflict in West Asia and broader geopolitical tensions on domestic economic activity. Looking at specific industries in context of our business, the [ October ] sector, this is data from [ Vahan ] continued to witness strong double-digit growth across key segments during H1 of 2027, with total vehicle sales reaching $15.6 million, showing a growth of 21.1%. More importantly, the growth of the industry across all segments was higher in quarter 2 2027 than quarter 1 2027 with the overall growth in Q2 being at 26.9% against Q1 growth of 16%. September 2026 was particularly a strong month, the total vehicle sales growing at 32%. This sustained demand provides a healthy base as we enter the key festive season. Bank credit remained robust and approximately 9.6% in quarter to 2027 compared with 17.6% in the preceding quarter. Lending to industry services and agriculture grew between 15% to 20% including approximately 15% growth in credit to large industries. These trends indicate broad-based credit demand and supporting financing conditions across both business investment and household consumption which is always a positive for our sector. Talking about regulatory upgrade. As you would be aware, IRDA has recently released a landmark consultation people titled recalibrate economics of insurance distribution, which seeks to address the evolving needs of the insurance sector, with the underlying emphasis on transparency, customer trust and distribution efficiency. This is expected to result in simplifying distribution structures, improving accessibility and enhancing customer experience. We believe that the broad objectives outlined in the paper are aligned with the long-term vision of insurance for all. Further the GST Council in its meeting held on October 8, 2026, has recommended further process reforms along with certain measures for trade facilitation and streamlining compliances. Within this, an important clarification relates to removal of restrictions and availing input tax credit on group health and life insurance. This recommendation will ensure a smoother flow of ITC across the supply chain. Let me now dwell upon the industry performance for the period ended September 30. The general insurance industry continued to demonstrate steady GDP growth of 8.9% in H1, supported by 10.9% in quarter 1 and 7% in quarter 2 2027. However, the GDPI growth, excluding Crop and Mass Health segment was 12.6% in H1 of 2027. Speaking of specific segments within the industry, the commercial land segment witnessed an improvement in growth trends during quarter 2 2027 as compared to the preceding quarter. Most of the key segments, namely engineering, marine, liability and [indiscernible], that is the segment stands [ fire insurance ] collectively reported a healthy growth of 15.9% for quarter 2 2027. While the fire segment continued to witness a degrowth of 26.6% for H1 2027, the pace of decline moderated to 24.4% in quarter 2 as against 27.8% in quarter 1 of 2027. With September at a degrowth of only 13.6%. These trends indicate a gradual improvement in the operating environment for commercial lines, which [indiscernible] well for the segment in coming quarters. As highlighted earlier, the Motor segment continued to record healthy growth, notably, EV penetration across passenger vehicles and 2-wheelers surged 1.5x rising from a 6.4% penetration to 9.7% with a combined 1.3 million vehicles sold during H1 of 2027. The industry registered a growth of 13.1% in motor insurance for H1 2027 vis-a-vis H1 2026. Moving into the festive season, we expect the motor sales to continue surprising previous trends. However, growth may appear to be moderated on account of a higher base. Health continues to be a fastest-growing segment for general insurance industry. This segment reported a robust growth of 21% for H1 2027, with health insurance group held line of business growing by 15. 3% while retail health recorded a healthy growth of 32% during the same period. As mentioned earlier, the recent GST council recommendation to allow input tax credit or employer sponsor group health is a welcome development. Improved affordability could encourage wider employee health coverage among SMEs and large corporates supporting the segment growth. Speaking on the underwriting performance of the industry. The underwriting performance of general insurance industry continue to remain under pressure, with the overall combined ratio deteriorated to 116.8% in quarter 1 financial year 2027 from 115% in quarter 1, 2026. Within this, the industry combined ratio for Motor segment deteriorated significantly to 11.4% in quarter 1 2027 from 125% in quarter 1, 2026, driven by increase in both loss ratio and commission ratio reflecting a continued pressure on underwriting profitability. Against this backdrop, ICICI Lombard's Motor combined ratio moved only marginally 108.3% in quarter 1 2027 from 107.6% in quarter 1, primarily attributable to the impact of Supreme Court judgment, as discussed during our previous earnings call. Consequently, the delta and combined ratio of motor between the industry and the company widened significantly to 23.1% in quarter 1 2027 from 17.4% point in quarter 1, 2026. This widening differential reinforces the strength of our underwriting disciplined pricing capabilities and claims management practices, enabling us to sustain our leadership position while consistently delivering superior outcome related to the industry. I will now proceed to present the company's performance across key business segments for half year. The company reported a growth of 5.4% in GDPI for H1 2027 compared to the industry growth of 8.9%. Further the GDPI growth of the company, excluding Crop and Mass Health segment was 13.9% for quarter 2 2027 as compared to industry growth of 13.2%. Within our commercial lines segment, Q2 2027 witnessed a significant improvement over the preceding quarter. Excluding Fire, our commercial line portfolio registered a healthy growth of 20% in quarter 2 2027 and 13.2% for H1 2027. With broad-based traction across lines of business, within Fire, the pace of decline moderated significantly with degrowth reducing to 21.2% in quarter 2 from 32.1% in quarter 1 2027. Pertinently, the degrowth for the month of September 2026 moderated further to just 6%, reflecting a sequential improvement through the quarter. Our market share in Fire and our business for the period ended half year 2027 stood at 12.2%. We have gained market share in Q2 vis-a-vis Q2 2026 in Fire from 11.4% to 11.9%, in marine cargo from 17.1% to 19%, in Engineering from 15.8% to 16.4% and [ Liability ] from 16.1% to 16.6%. We maintained our leadership position in marine cargo and engineering line of business for H1. In the Motor segment, we recorded a healthy growth of 13% for H1 2021 broadly in line with the industry growth of 13.1% for H1 2027, thereby maintaining our market leadership position with market share of 10.3% for H1 2027. We remain focused on strengthening our granular distribution across OEM dealerships and diversified retail channels. Our portfolio mix for private car, two-wheeler and commercial vehicles stood at 49.8%, 28.1% and 22.1%, respectively, for H1 2027. As indicated during our quarter 1 2027 earnings call, the company had made incremental provisions towards the motor third-party reserves following the Supreme Court judgment in the [indiscernible] case. In line with our prudent and conservative reserving philosophy. Given that the judgment was delivered towards the end of the quarter, the company had recognized the impact on entire portfolio for quarter 1 of 2027, resulting in an incremental reserving requirement. During Q2 of 2027, we have calibrated our business operations to factor in the implications of the judgment and the team has now been fully integrated into a regular course of business. Looking ahead, we are well positioned to enhance our market position given the robust volume growth as reflected in [ Vahan ] data, increased retention rate and significant difference in a combined issue versus that of the industry in multi-insurance segment. In Health segment, we recorded a healthy growth of 26.8% for H1 2027 as in the industry growth of 21% for 2027. Our retail health business continued to demonstrate strong growth of 66.4% for H1 2027, significantly outpacing the industry growth of 32%. Consequently, our market share improved to 4.7% for H1 2027 from 3.7% for the corresponding period last year. Fortunately, we exited September 2026 with the market share in retail health reaching 5% for the first time, reflecting the sustained strength of our retail health franchise. The [ group health ] segment recorded a growth of 15.4% for H1 2027 with market share remaining stable at 8.8% for H1 2027, in line with the corresponding period last year. On August 3, 2026 ICICI Lombard marked it's Silver Jubilee, celebrating 25 years of operations. As we step into the next phase of our journey, we remain committed to driving innovation, strengthening our customer promise and creating sustainable long-term value. We extend our heartful gratitude to all our stakeholders for their trust and support, which continue to inspire our progress. To commemorate the significant milestone ICICI Lombard innovative solutions across multiple lines of business, including offerings such as complete home protect, [ for care], motor service [indiscernible] and power booster, plus amongst others, notably, these comprise 5 industry-first and 7 industry-leading solutions. Further, the company organized its digital day in the last week of September 2026, where we show cost, how technology is closely integrated with our business operation and helping us drive tangible outcomes across key areas, including product development, underwriting, claims management and customer service. I would like to thank all of you who took the time to participate in the event. On the same day, we also launched the latest and insurance offering [indiscernible] for our [indiscernible] customers, designed for a comprehensive value solution that go beyond the regional health insurance production. The product reflects [indiscernible] remaking insurance more relevant and accessible to the younger generation. [indiscernible] chain security, accelerating in [ teams ] and strengthening [indiscernible] assessment with human oversight. This year rates on lead-related results have improved from 45% to 60% through usage of GenAI. Adoption of our digital journeys for customer service continue to grow with 73% of our total customer interactions being handled through digital DIY journeys as against 39% last year. In health underwriting, our industry first [indiscernible] GenAI helps customers complete their underwriting through conventional interface, conversational interface, enabling a more comprehensive risk assessment and faster turnaround time. This journey now increased in over 40% of our agency business, new business. These initiatives I outlined reflect our continued focus on easing technology and innovation to strengthen our business capabilities and drive sustainable profitable growth. As articulated during our recent digital day, one of the key strategic priority is to scale up digital sourcing with a defined road map to elevate its contribution from the current 6% to 15%, thereby reinforcing our commitment to innovation and future [indiscernible] distribution. I will now request Gopal to take us through the financial numbers of H1 2027.

Thanks, Sanjeev, and good evening to each one of you. Before I proceed with giving a brief overview of the financial performance of the recently concluded quarter and half year, I would like to share here with some aspects of some of the key initiatives as an organization. Our IL TakeCare app, a one-stop solution for insurance and wellness needs achieved 23.3 million downloads as at September 30, 2026 reflecting growing digital adoption. The total number of health and travel claims service to the IL TakeCare app witnessed an uptick by 25.6% and reached 3 lakh 78,583 claims for H1 FY '27. Our preferred provider network service 75.9% of our non-OEM claims for quarter 2 FY '27, vis-a-vis 75.1% for Q2 FY '26. In the health segment, 99.2% of our total claims were paid within 30 days for the half year FY '27. 93% of the customers surveyed as a part of our IL side initiative have rated their experience as exemplary that has given us a score of at least greater than or equal to 4.5 out of 5. Now moving on to the financial performance. We have uploaded the results presentation on the exchanges. You can access it as we walk you through the performance numbers. All numbers mentioned below are on an end basis, unless stated otherwise, please refer or our investor presentation on Slide 14 to 17, which have got details of outcomes on both end and [ 1 by ] and for further details. Our combined ratio was 104.5% in Q2 FY '27 as against 103.9% in Q2 FY '26. Excluding the impact of CAT losses of INR 1.18 billion in Q2 FY '27 and INR 0.73 billion in Q2 FY '26. The combined ratio was 102.7% and 102.6%, respectively. Combined ratio was 105.2% for H1 FY '27 as against 103% for H1 FY '26. Excluding the impact of cat losses of the same number, INR 1.18 billion in H1 and INR 0.73 billion in H1 of last year. The combined ratio was 104.2% and 102.3%, respectively. Our investment assets during the quarter rose to INR 643.32 billion as at September 30, 2026. This is up from INR 605.79 billion as of June 30, 2026. Our investment leverage set of borrowings was 3.58x as at September 30 as against 3.59x as at June 30, 2026. On a quarterly basis, investment income was at INR 15.54 billion in Q2 FY '27 as against INR 12.49 billion in Q2 FY '26. Investment income for the current half year was INR 27.28 billion as against INR 25.38 billion in H1 last year. Capital gains stood at INR 4.53 billion in Q2 FY '27 as compared to INR 2.36 billion in Q2 FY '26. Our capital gains stood at INR 6.37 billion in H1 FY '27 as compared to INR 6.16 billion in H1 FY '26. Our profit before tax grew by 27.8% at INR 13.59 billion in Q2 FY '27 as against INR 10.63 million in Q2 FY '26. Whereas PBT de-grew by 5.8% and stood at INR 19.21 billion in H1 FY '27, as against INR 20.39 billion in H1 FY '26. Consequently, PAT grew by 27.5% and stood at INR 10.31 billion for Q2 FY '27 from INR 8.09 billion in Q2 FY '26. Our profit after tax degrew by 5.8% and stood at INR 14.54 billion in H1 FY '27 as against INR 15.46 billion in FY '26. The ROE was for the quarter 2 FY '27 was 23.7% as against 21.3% in Q2 FY '26. Return on average equity was 16.8% in the half year FY '27 as against 20.7% in H1 FY '26. Solvency ratio was at 2.74x at September 30, 2026 as against 2.68x at June 30, 2026, continues to be higher than the regulatory minimum requirement of 1.5x. Solvency ratio was at 2.62x as at 31st March 2026. The Board of Directors of the company has declared an interim dividend of INR 7 per share for H1 FY '27, as against INR 6.5 per share for H1 FY '26. As I conclude, I would like to reaffirm that we continue to stay focused on driving profitable growth and sustainable value creation while protecting the interest of our stakeholders and customers at all times. With this, we will be happy to take questions from all of you. Thank you.

[Operator Instructions]. Your first question comes from the line of Nischint Chawathe with Kotak.

Just 2 questions. One was -- now looking at the change in the [indiscernible] ratio on a sequential basis is almost 2,000 basis points. So I was just curious how to read this? Have you provided for the recent Supreme Court project this time around? And what could be the ratio ex of that? And the second question obviously is on the distribution reforms and how do you see that affecting your business?

So Nischint, thanks for that. And this was obviously an expected one. And so I think we have always maintained that at an aggregate level, third party is always a line of business that obviously exhibits a long-tail liability of claim development. And hence, to that extent, the time at which we provide for ultimate loss reserves and, let's say, the development of claims paying out, obviously takes time. And hence, to that extent, we have always maintained to kind of look at outcomes on -- particularly for motor third-party over long cycles. Ideally, on a year-to-date basis or ideally longer annual cycles. Having said that, I think if you look at our large development patterns over years, particularly on the third-party book, I think we have generally followed a principle of prudence at the timing we have underwritten the risk. And the portfolio has always exhibited consistently over long periods a small amount of reserve releases. And hence, to that extent, a particular quarter will also get influenced by maybe some of this development of losses getting actualized. And to that extent, the loss ratios are what they are in terms of its ultimate depiction. Having said that, I think if all of you would recollect, I think we have been kind of proactive even in quarter 1, when the judgment had come in to call out the need for the industry to get impacted consequent to the judgment. And on that basis is where this is the available information that we had at that point of time I think we are considered for a reserve requirement of INR 1.65 billion in Q1. Having said that, we did at the same time in the call did speak about to make sure that as an ordination, we would want to kind of take this going forward as the business as usual element. And hence, to that extent, what we have been able to achieve is on the extent of the reserving, we don't anticipate any need for any further requirement of provision for reserves. And to that extent, of course, we will continue to monitor in terms of what the development of core judgments are because, as I said, the book takes time to kind of play out. But at this point of time, in line with what we had said honestly, it's not a part of our business as usual. And genuinely, we don't believe the need for us to separately call out any specific additional charge consequent to the Supreme Court judgment. So that is where we are on the change in the motor third-party loss ratio. On the distribution reforms, then maybe I think I will request ...

Yes, yes. So clearly, I mean, it's -- as we also said in our investor [indiscernible], change 2-year recalibration in terms of how insurance will get distributed probably from next year onwards and whatever the regulator has put across is a reboot in many ways. We have seen across industry in the past that whenever cost that's moderated or made reasonable volumes pick up. And that's where the penetration equation that we want will call out for us as an institution, whatever the wish that comes from the regulator is 100% binding, and we look forward to this evolving over time and coming into the play [indiscernible], this is -- and we are as much a spent of the draft as anybody else in the industry. It is -- if you look over quarters, will be a big plus for the industry in every possible manner over time is what we will say at this point of time.

Sure. And given the fact that commissions have -- I mean, are potentially coming off significantly. Do you see the risk of third-party tariffs getting revised downwards?

I mean, look, every call, I think we said we are right, every call we've had this discussion where the current economics used to make us believe that we would seek a hike in third party. How does it get viewed out? How does the paper get finalized, multiple variables, which are there? This obviously is the one which is related to the third-party claim deflationary. It will obviously lower down the cost. And to that extent, yes, there is a place that comes with it. But at the same time, we have seen judgments changing the economics of it. So it's playing out both ways and early days to say how it will get addressed. But all I can say is you've got a point and you are as much processing it at this point of time as anybody else and it may [ change ] acknowledge. The answer is yes. How and when? This only time will tell.

And just one last one, if I can --

Sir, I request you to return to the queue for any further for questions. We have our next question coming from the line of Supratim Datta with Jefferies.

My first question is on the Motor TP side. So we see that on the motor side, there has been a mix shift with the share of 2-wheelers going up this quarter. Just wanted to understand what role has that played in the Motor TP loss ratio, if any? So that would be my first question. The second would be on IFRS accounting, I do understand that the commission ratio will be higher is again a function of this mix going up. If you could -- given you would have filed the first quarter financials on IFRS with the regulator. If you could give us some color on if one [indiscernible] in and then we know how the economics you're playing. But if you transition to IFRS, how would these numbers change? If you could give us some color there, that would be really appreciated. And lastly, if you could give us how is the loss ratio, the retail group held and the attachment loss ratio moved this quarter versus last quarter that you gave. That would also be very helpful.

Thanks, Supratim. I think I'll go in the reverse order. I'll start with the loss ratios on group health. This is -- I'm giving you numbers for Q2 last year, both for group health and retail indemnity. Group health last year was 93.7% and retail indemnity was 65.4%. Both of these numbers are for Q2 last year. The same numbers in the current quarter 2 for group health is 97.9 and retail indemnity is 64.6. Both of these ratios, I think if you look at it, it's pretty much within the ranges that we have always spoken about as in to say that the group will continue to -- be underwritten at typically around the mid-90 level -- mid-95 levels. And retail health, we always maintained that the loss ratio range that we are comfortable underwriting is between 65% to 70%. So hence, to that extent, I think it has kind of both of them have kind of paid out in line with what one had been kind of speaking about. The good part is, I think if all of you would recollect in Q1 when we announced results, our group and loss ratios were actually close to 200 almost [indiscernible]. So relation to that, on a sequential basis, actually, we have seen an improvement in the corporate held loss numbers. So in that sense, that's a good sign. And generally, we believe I think even in so far as the way forward is concerned, we should continue to see efficiencies coming on the corporate side. So that's on the group -- I mean, the health loss issues break down. On IFRS, I think as always mentioned, you [indiscernible] drill come back to -- and we will explain in terms of what the impact is on account of, let's say, the change from GAAP to IFRS. Yes, you're right. We had to kind of do the regulatory filings of quarter 1 by September 30, which is what we have done. And having said that, I think we will obviously come back and maybe at a separate point of time. Take all of you through in terms of what do we see? How do we see the impact of the change from Indian GAAP to IFRS play out. Having said that, I think we will continue to reiterate that 1 should keep looking at one form of reporting on a consistent basis for any form of comparisons. Relative comparisons, honestly, will not necessarily lead you to any meaningful outcomes. So let me go back. On the motor third party, loss ratio, I think just to again kind of reiterate, we have always maintained the outcome of the combined ratio of motor in specific. You're right, it gets influenced by what we write is the mix, what we kind of incur at the cost of acquisition, et cetera, et cetera. And that's the reason why -- and we have also seen that obviously, third party is, in that sense, a tariff product and own damage is free to price. And that's the reason we have always maintained the way you should look at loss ratios for motor in specific is to look at it in aggregate. And the range that we have always spoken is to kind of see the book running at between 65% to 67%. And there, if you would have seen the numbers for H1 last year was about 66.6% for overall motor and H1 of the current year, the number is about 65.4%. So it's well within the range that one has seen. And hence, that is where we are -- but some of this asset gets influenced by mix, it gets influenced by the quality of risk that we underwrite. And third and more importantly, genuinely both on own damage and on third-party. On ground, we do a lot of work when it comes to managing claims efficiently, and that also has a significant role to play out when it comes to outcomes of the loss issue.

Also just what we source in the current quarter and that on a business as usual basis will not change the economics of third-party. Third-parties more about the book that is flowing over multiple quarters that we acquired. But yes, if the 2-wheeler has enhanced contribution, which is what you see, it does have a P&L impact in terms of cost of acquisition, which gets debited and the benefit of that flows over time. So to that extent, it's the cost part which comes in, not the third party, which impact gets impacted immediately.

[Operator Instructions]. Our next question comes from the line of Nidhesh with Investec.

So first question is again on consultation paper. So post implementation of the proposed consolidation paper, how do you see industry growth evolving, specifically on the renewal business on the motor side? Because commission rates have been cut quite sharply and [ POSP ] channel, which probably the large contributor to CVT business that may see a big disruption. So how do you see renewal business evolving? And what are the steps to that company will be taking to improve on the renewal business? And second is, sir, what is the rationale of growing in CV segment when the Motor TP price have not changed in the last 3 years and Supreme Court verdict is also likely to increase the claims severity in the future? These are the 2 questions here.

So on the consultation paper, I think, again for us, not just the consultation paper. I think if you look at for ICICI Lombard, obviously, sourcing of businesses either through new or, let's say, continued retention of our customers, obviously, has been a priority. And most of you would have kind of heard us -- have been hearing about the increased focus that we have obviously kind of put on retention as an area of trust. And if you would all recollect, even in the last year, when we spoke in the April earnings call, we did talk about the retention numbers kind of moving at an aggregate level across both the retail lines anywhere between 3% to 5%. And that particular trend continues even if you look at the first half year. I think first half year related to half year of last year, I think we have been able to see an improved retention in that range of 3% to 5%. So honestly, for us, retention continues to be an area of focus. And with the distribution reforms, obviously, it kind of further aids because genuinely, we believe that the objective with which the facility paper is put out, is to also kind of meet the requirement of trying to see how we can kind of improve penetration and insurance becomes far more affordable in the hands of policyholders or customers and therefore, to that extent, obviously, it significantly aids any which ways our increased [ thrust ] on improving renewals. So that's on the response to the point on renewals. To your point on CV, I think we have always maintained that we would obviously want to kind of write risks which are relevant from an underwriting standpoint. And that's the reason why we always keep saying that the mix of motor between 2-wheeler, private car and CV. At various points of time, we'll obviously undergo a significant change and which is what you would have seen even when you would have looked at the mix of -- forget about year-on-year. Even if you look at it on a sequential basis, there would have been some kind of a change in the mix of private car 2-wheeler and CV in the overall composition of motor. Having said that, on the commercial vehicle side, in general, I think what we have maintained is we have tried to kind of keep the overall mix in the range of -- within that 20% to 25% band. And if you would have seen even for the half year gone by, I think the extent of TV that we have is within that range. So that's where we are. And honestly, what we have been writing is actually also being kind of creating value for us from an ROE standpoint and hence to that extent mix, that's the reason why we have been kind of writing the segment.

There's a follow-up on 3D in the segment. On CVP, since there is no additional value that customers getting pricing is like you do have been saying and distributor commission is cut. So how that will improve penetration in your view?

See all this is still work in progress in many ways, and there are certain sections which have been impacted with the change in guidelines [ adversely ] certain who -- there is a big trust that will be given to the digital part of the business. Motor is not a discretionary purchase. Motor is the law of the land where -- you are expected if you're applying your vehicles on road, you're expected to have a coverage. So I'm sure there is enough pull available on the customer side to seek cover and the economics part of it as to how it comes out is all subject to discussions. And right now, the regulators itself has been very clearly seeking feedback from each and every section who has been impacted, and we wait for those discussions to conclude from the regulator side, and we will be abiding with whatever final outcome that comes. Sure, the -- so please understand Motor is the one which is very clearly driven by a reasonable pool, it's not a push product, yes?

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

Just on motor order loss ratio, given the 2 car contribution has come down Ideally, it was -- there is an impression that motor loss issues should improve because car is the most abused product, if I want to put it in that way. But our numbers have deteriorated relatively if I look year-on-year or sequential. So just wanted to understand what led to that? Is it because of the more renewal pie in the overall motor [ OD ] business is leading to that? That's my first question. And the second question, again, is on reinsurance accepted business, which seems to have done meaningfully very good in 2Q. Just wanted to understand the color of the business, how significant it is different from what you did last year?

So Sanketh, I will go in the same sequence. So motor only, all of you -- again, I'll just keep reiterating this time and again, one, you should keep looking at motor aggregate, 65 to 67 band. That's the range that you should look at for the overall category. Having said that, generally, what you experience is in quarter 2, there are a lot of, let's say, weather-related events that play out. That's true for any particular quarter 2. And you would have seen this particular quarter getting impacted by severe flooding events across different states. And therefore, the number that you get to see there is inclusive of the impact of some of the floods that we have seen that has impacted different segments of businesses. And that's the reason we have separately called out the overall impact of the losses from some of the flood events, aggregating to almost about INR 18 crores in quarter 2 of this year related to roughly about INR 70 crores, INR 75 crores of impact that we had in quarter 2 of last year. So therefore, you have to look at whereas in Q1 since you said those numbers have gone up sequentially. In Q1, obviously, you would kind of recollect that we did not necessarily have in that sense, any in that sense, impact on any flood events. So therefore, the numbers have to be looked at.

So Gopal, exact cat event in motor OD, is it fair to say the loss ratios remain stable or improved? If you can give that number, it will be useful there.

So which is the reason if you recollect, I did talk about when in response to one of the earlier questions, I did kind of equally say that both on OD and on third-party. Genuinely on ground, we do a lot of efficiency with respect to some of the claim settlement practices. And that's also the reason why if you also see one of the other metrics that we keep putting out is the percentage of claims that we service through our PPN network. It's also something that kind of has seen a continued increase. It's almost 75% of our claims get serviced to the non-OEM platform. And yes, you are right. If one was to kind of take out the impact of the flood losses. In the quarter 2 OD loss ratio numbers, the number will be sequentially better than what you would have seen in Q1.

Yes, Sanjeev. You're spot on. Adjusted to cat event, you would find our only book has run on a related basis far more efficiently than what it was.

Yes. So that's in response to the first one. On the second one, I think, again, we have maintained that the overall reinsurance accepted book on an annual basis, we have said that what we are comfortable is a single-digit number as the overall contribution. That's broadly the range at which we have kind of seen the overall mix of range as accepted. Having said that, what we write is only -- which is very similar to the same thought process what we have even on the domestic side, which is only if it is making underwriting sense is when we write for some of these risks. And hence, to that extent, there is no change in the quality of book that we have underwritten in this half year or this quarter to related to, let's say, what we would have done even in the prior periods.