MUMBAI: ICICI Lombard on Thursday reported just 7.5% increase in net profit during the fourth quarter ended March 31, 2019, following an increase in upfront cost of acquiring business.uring the quarter, profit rose to Rs 228 crore, compared with Rs 212 crore in Q4 FY18.
This includes upfront expensing of the acquisition cost related to the growth of 29.4% in GDPI (gross direct premium income) excluding crop segment whereas the full benefit of earned premium will be realised over the policy period, the company said in a statement.The company has proposed a final dividend of Rs 3.5 per share for FY19.
ROAE was 17.5% in Q4 FY19, compared with 19.1% in Q4 FY18.
Solvency ratio improved to 2.24x during the quarter ended March 31, 2019, against 2.12x in the previous quarter, and higher than the minimum regulatory requirement of 1.5x.The combined ratio improved to 98% in Q4 FY19 from 99.5% in Q4 FY18.Losses are due to accounting policy because the way accounting is done, cost of sourcing the business, including distribution, is upfront, said Bhargav Dasgupta, MD and CEO ICICI Lombard General Insurance.
The attempt is to keep the combined ratio around 100%.The gross direct premium income rose 19.1% year-on-year to Rs 3,485 crore in Q4FY19 compared with Rs 2,926 crore.
Weve been growing faster than the market, Dasgupta said, adding, Were cautious on tender-driven business because it is difficult to predict tender business.