ICICI Lombard reports 46% profit decline, stock reacts

The insurer ICICI Lombard announced a 46 percent year‑on‑year fall in net profit for the April‑June quarter of FY27, prompting a sharp sell‑off in its shares. Net earnings dropped to Rs 403.17 crore from Rs 747.08 crore a year earlier.

The market opened with the shares down 14.88 percent at Rs 1,544 on the NSE, later easing to a 11.39 percent decline at Rs 1,607 by noon. The profit squeeze was driven by higher claim frequencies and a Rs 165 crore reserve for motor third‑party liabilities.

Additional pressures came from a Rs 63 crore loss linked to a fire incident and a 2.8‑point increase in the combined ratio due to a Supreme Court order. The underwriting combined ratio rose to 107.2 percent, compared with 102.9 percent last year.

Management assured investors that fire‑related losses are unlikely to persist and emphasized a robust growth trajectory for the health insurance segment. Following the earnings release, Motilal Oswal Financial Services downgraded the stock from "Buy" to "Neutral".