AM BEST AFFIRMS ICICI LOMBARD CREDIT RATINGS

KUALA LUMPUR, March 4 (Bernama) -- Global credit rating agency, AM Best has affirmed India’s ICICI Lombard General Insurance Company Limited (ICICI Lombard) financial strength rating of B++ (Good) and the long-term issuer credit rating of “bbb+” (Good).

Concurrently, the credit rating agency has assigned the India National Scale Rating (NSR) of aaa.IN (Exceptional) to ICICI Lombard, with the outlook to these credit ratings (ratings) stable.

In a statement, AM Best said the ratings reflected ICICI Lombard’s balance sheet strength, which was assessed as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

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The company’s robust regulatory solvency position is supported by a track record of strong internal capital generation, with shareholders’ equity having exhibited a five-year average compound annual growth rate of 15 per cent, as calculated by AM Best (fiscal-years 2019-2023).

In addition, AM Best views the company as having strong financial flexibility as demonstrated by its track record of capital raising activities.

An offsetting balance sheet strength factor remains ICICI Lombard’s moderate-risk investment portfolio, which includes significant exposure to equities and fixed income securities that are non-rated on an international rating scale.

The company’s operating performance was also viewed as strong, with a five-year average return-on-equity ratio of 18.2 per cent, as measured by AM Best (fiscal-years 2019-2023), with robust overall operating results, albeit reliant on investment income (including capital gains) to offset underwriting losses.

Although ICICI Lombard’s five-year average combined ratio was 104.8 per cent, it has consistently outperformed the domestic general insurance market in India. Underwriting performance improved in fiscal-year 2023, mainly driven by a reduction in COVID-19 claims from the health business.

ICICI Lombard is the second-largest non-life general insurer in India, with an overall market share of 8.2 per cent based on fiscal-year 2023’s gross domestic premium income, and is anticipated to enhance its underwriting risk selection via the adoption of technology and analytics.

-- BERNAMA