India's ICICI Lombard General Insurance reported a 46% drop in first-quarter profit on Wednesday, hurt by weakness in the commercial insurance segment and a rise in claims paid.
Profit after tax for the general insurer fell to 4.03 billion rupees ($41.87 million) for the three months ended June 30, from 7.47 billion rupees a year earlier.
While analysts had predicted pricing pressure in commercial insurance - particularly the fire segment - as a drag, robust demand for retail health insurance following tax cuts and motor insurance backed by healthy vehicle sales provided support.
The commercial segment contracted 13.8%, primarily led by heightened competitive intensity in the fire segment, the company said.
The company incurred two large fire insurance losses worth about 630 million rupees. It also took a 1.65 billion rupees charge to strengthen reserves for motor insurance claims following a Supreme Court ruling, without providing further details.
Its claims paid rose nearly 21% to 35.16 billion rupees.
ICICI Lombard's retail health gross premiums rose 69.5% year-on-year. Motor insurance, the company's largest segment, grew 14% during the quarter.
The insurer's combined ratio worsened to 107.2% from 101.2% in the previous quarter, meaning claims and expenses exceeded premium income. A reading below 100% indicates underwriting profitability.
Backed by ICICI Bank, one of India's largest private lenders, ICICI Lombard offers marine, crop and travel insurance, in addition to motor and health coverage.
