Q4 Results today: ICICI Lombard, ICICI Pru Life to see mixed Q4 earnings amid changing insurance landscape, say experts

Q4 Results today: The earnings season for the fourth quarter is currently in progress, with several significant companies set to release their results on Tuesday, April 15, including ICICI Lombard General Insurance Company Ltd and ICICI Prudential Life Insurance Company Ltd. According to a report from brokerage firm Motilal Oswal Financial Services, it anticipates a slight sequential change in VNB margins for life insurance companies, driven by an increasing proportion of higher-margin products in their offerings and the advantages of non-par repricing.

On the flip side, the brokerage suggests that general insurance companies are experiencing the effects of a decline in motor sales as well as the rollout of 1/n reporting for gross written premium (GWP) related to long-term business. Although the claims environment is expected to remain favorable, a rise in the operational expense ratio due to 1/n accounting is likely to increase the combined ratio.

Q4 Results Preview

ICICI Prudential Life Insurance Company Ltd

According to estimates from Kotak Institutional Equities, ICICI Prudential Life experienced flat APE trends year-over-year during the first two months of the quarter. The high comparison base from March 2024 is expected to impact March volumes, resulting in a projected 5.5% year-over-year decline in 4QFY25. The margin remains stable in the range of approximately 22-23%, with a low base contributing to around 150 basis points of year-over-year expansion.

Nuvama Institutional Equities emphasized that management's commentary on growth in protection and pension products will be a key area of interest, along with insights into any potential shifts in ICICI Bank's strategy. Attention will be directed towards margins for the second half of the year and beyond.

ICICI Prudential Life Insurance announced a 43 percent increase in net profit, reaching ₹326 crore for the third quarter ending December 2024. The life insurance firm, backed by ICICI Bank, had recorded a profit of ₹227 crore during the same quarter the previous year.

In the third quarter of the current fiscal year, net premium income rose to ₹12,261 crore, compared to ₹9,929 crore from a year earlier, as reported by ICICI Prudential Life in a regulatory filing.

ICICI Lombard General Insurance Company Ltd

According to Nuvama Institutional Equities, the Cost of Risk (CoR) may worsen due to the changes in accounting practices for long-term policies. The management has not provided specific guidance on CoR as the effect of the new accounting method on distributor payments is still developing.

General insurer ICICI Lombard reported a 68% increase in net profit, reaching ₹724 crore for the three months ending December 2024. In the same period last year, the company posted a net profit of ₹431 crore.

The gross direct premium income for the quarter fell to ₹6,214 crore, compared to ₹6,230 crore during the same quarter a year earlier, according to ICICI Lombard's regulatory filing.

Stocks in focus

According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, ICICI Pru share price was down 3% with strong volumes on Friday during a strong up day for broader markets. Prices formed a pattern similar to bearish engulfing and until it crosses back above ₹580 it will remain under pressure with immediate support around recent lows of ₹525.

Further, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, explained that ICICI Lombard share price corrected over 29% in less than 23 weeks, but the strong rally seen during the March series suggests a short-term bottom is in place. Investors can consider accumulating around the ₹1,700 zone, while traders should watch for momentum above ₹1,855. In both scenarios, the 50% retracement level of the entire fall, placed at ₹1,955, will be the first major upside target. Overall, the price action indicates improving sentiment and potential for a meaningful bounce.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.