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Last Updated : Oct 18, 2019 08:19 PM IST | Source: Moneycontrol.com

ICICI Lombard General Insurance Q2 net profit up 5%

The board has announced a payment of interim dividend of Rs 3.50 per equity share of face value of Rs 10 each, for the half-year ended on September 30, 2019.

 
 
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Private non-life insurer ICICI Lombard General Insurance posted a 5 percent year-on-year (YoY) increase in its September quarter (Q2) net profit at Rs 307.91 crore.

The general insurer's underwriting loss came down significantly to Rs 8.75 crore compared to Rs 21.49 crore loss in the year-ago period. The combined ratio stood at 102.6 percent in Q2FY20 compared to 101.1 percent a year ago.

In terms of segments, motor insurance saw an underwriting loss of Rs 102.10 crore in Q2 compared to the underwriting profit of Rs 30.95 crore in the year-ago period.

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The gross direct premium income (GDPI) of the insurer stood at Rs 2,953 crore in Q2FY20, which was a 16.4 percent YoY drop. However, the insurer said that excluding the crop segment, GDPI increased by 14.5 percent YoY to Rs 2,898 crore in the September quarter.

In the post-earnings call, Bhargav Dasgupta, MD & CEO, ICICI Lombard said that they will want to maintain a 15-20 percent growth for their targeted non-crop segments in FY20.

However, he added that the strategy to go cautious on crop insurance due to the hardening of rates will continue to impact the GDPI numbers in FY20.

The board has announced a payment of an interim dividend of Rs 3.50 per equity share of the face value of Rs 10 each, for the half-year ended on September 30, 2019.

In September 2019, the government cut the corporate tax rate to 25.17 percent from 35 percent earlier. This, said the company, will benefit them from the subsequent quarters.

Gopal Balachandran, chief financial officer, ICICI Lombard said that they have decided to opt for a lower rate of tax which is about 25 percent. This, he said, has reflected in the reported profit after tax numbers.

"But have an opening deferred tax asset which was earlier created at an effective tax rate of 35 percent. Now that we have opted to go for a lower rate of tax, we are also required to reassess the opening deferred tax asset. This has led to an increase in tax liability of almost Rs 90 crore. While a reduction in tax rate has helped us to the tune of Rs 90-95 crore but reversal of deferred tax related tax to Rs 85-90 crore," he added.

On a net basis, Balachandran said that they seen a positive impact of Rs 7 crore in the half year numbers. Going forward, he added that the insurer will be subjected to a reduced corporate tax rate.

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First Published on Oct 18, 2019 06:38 pm
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