ICICI Lombard digital stack drives faster claims, lower servicing costs and retention
ICICI Lombard General Insurance Company Ltd.
Neutral
₹1,515
₹1,589.6
₹1,700
12.21%
Technology-Led Insurance Model
In its September 29, 2026 company update on ICICI Lombard, Motilal Oswal highlights the insurer's transition towards a technology-led insurance model following its Digital Day. Management outlined the deployment of ICICI Lombard's in-house digital stack across distribution, product design and pricing, risk management, claims, servicing and customer retention.
Motilal Oswal believes this technology platform, together with the company's scale, multi-product portfolio and multi-channel distribution architecture, should support operating efficiency and help the insurer manage an evolving industry structure.
Reported Digital Operating Benefits
The reported benefits from digital integration include faster product launches and claims settlement, higher digital servicing penetration and lower transaction costs. Digital transactions carry around 90 per cent lower cost than manual transactions.
| Metric | Earlier level | Current level |
|---|---|---|
| Product go-to-market time | About six months | Around four weeks |
| Motor-claim settlement time | Six days | Around 3.3 days |
| Digital servicing penetration | Around 20% in FY23 | More than 71% currently |
ICICI Lombard is using Customer 360 dashboards, propensity-led renewal targeting and artificial intelligence-enabled outbound engagement to identify customers with greater renewal potential. API-led integrations with hospitals, garages, doctors and other partners are intended to strengthen the customer proposition beyond the core insurance product.
FY29 Management Objectives
Management's FY29 objectives include raising digital sourcing to 15 per cent of sales from around 6 per cent currently and generating 100 to 200 basis points of growth outperformance against the industry. New products are targeted to contribute 3 to 5 per cent of gross written premium by FY29, while digital servicing is targeted to reach 90 per cent of servicing journeys.
| Objective | FY29 target |
|---|---|
| Digital sourcing | 15% of sales, versus around 6% currently |
| Growth outperformance | 100–200 basis points versus the industry |
| Contribution from new products | 3–5% of gross written premium |
| Digital servicing | 90% of servicing journeys |
| Retention improvement | Around 5% |
| Catastrophe-loss performance | Around 5% outperformance versus the industry |
| Combined-ratio advantage | More than 10% sustainably versus the industry |
| Return on equity | 17–20% |
Identifying Businesses With Long-Term Growth Potential
Exceptional wealth creation often comes from businesses that compound over time. DSIJ's Multibagger Pick focuses on identifying growth-oriented companies through detailed fundamental research.
Growth Opportunities
Motilal Oswal sees a substantial insurance protection gap, particularly in motor and health insurance, as an opportunity for ICICI Lombard. The broker believes changing customer behaviour, rising digital adoption and new products can unlock latent demand.
Climate events, cyber and surety are identified as additional areas of general-insurance growth. The broker also notes that the retail health segment continues to gain market share, with strong traction in the Elevate product.
Key Risks and Industry Considerations
- Competitive intensity in motor own-damage insurance and heightened competition in commercial lines remain principal concerns.
- ICICI Lombard is following a conservative reserving approach in motor own-damage after the Supreme Court judgement.
- Proposed changes to the EoM framework could reduce the earlier 30 per cent benchmark to 25 per cent and subsequently 20 per cent, resetting distributor economics.
Motilal Oswal believes ICICI Lombard's channel-agnostic model, diversified distribution and ability to deploy technology across channels should help it absorb the regulatory and competitive transition over the longer term.
Valuation and Financial Forecasts
Motilal Oswal retains a Neutral rating and values ICICI Lombard at Rs 1,700, based on 25 times FY28E earnings per share.
| Metric | FY27E | FY28E |
|---|---|---|
| Gross written premium growth | 11.6% | 12.7% |
| Combined ratio | 103.3% | 102.2% |
| Return on equity | 15.7% | 17.1% |
| Profit after tax | Rs 2,799 crore | Rs 3,448 crore |
Disclaimer: This is a summary of a research report published by the broker/research house identified above. The views, recommendations, target prices and estimates are those of the respective broker and do not represent DSIJ investment advice. The summary may be AI-assisted, hence please refer to the original report for complete details, disclosures and risks.
