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Gross domestic premium income grew 20% YoY and 24% QoQ in 1QFY24 to INR66b, better than our estimate.

* NEP was in line with our estimate at INR37.3b, up 12% YoY and 4% QoQ. NEP for Health business grew 32% YoY, led by 36% growth in Group Health. The Motor segment grew 3% and Marine grew 10% YoY. NEP in Crop was higher by 145% YoY, while the Fire segment was down 13% YoY.

* Claims ratio came in at 74.1% vs. 74.2% QoQ. The loss ratio for the Motor segment declined YoY, but it increased for all other segments. The claims ratio was higher than our expectation.

* Total expense ratio stood at 29.7% vs. 29.9% in 4QFY23 (our est. of 29.1%).

* Combined ratio was at 103.8% vs. 104.2% in 4QFY23 and 104.1% in 1QFY23. Excluding the INR0.35b impact of the cyclone, the combined ratio was at 102.9% in 1QFY24, broadly in line with our estimate of 102.5%.

* Underwriting loss stood at INR3.2b vs. a loss of INR2.5b in 4QFY23 and higher than our estimate of a INR1.9b underwriting loss.

* Investment income was weaker than expectations in both policyholders and shareholders’ accounts.

* PAT came in at INR3.9b (18% miss), up 12% YoY and down 11% QoQ.

* Solvency ratio stood at 253% vs. 251% in 4QFY23.

* The management continues to guide for better performance, and hence we keep our estimates unchanged for FY24/FY25. We retain our BUY rating with a TP of INR1,550 (32x FY25E). Lower investment income impacts profitability

* Total GWP grew 20% YoY to INR

Lower investment income impacts profitability

* Total GWP grew 20% YoY to INR66b in 1QFY24 and NEP grew 12% YoY to INR39b, with the NEP-to-GWP ratio at 59% vs. 63% in 1QFY23. NEP was broadly in line with our estimate.

* NEP for Health/Motor/Marine/Crop businesses grew 32%/3%/10%/145%, whereas it declined 13% YoY for the Fire segment.

* Total investment income (shareholders + policyholders) declined 51% QoQ but increased 23% YoY to INR8.4b (~6% lower than our estimate) .

Higher-than-expected loss ratio; excluding the cyclone impact, combined ratio broadly in line

* ICICIGI reported a loss ratio of 74.1% in 1QFY24 vs. our expectation of 71%. On YoY basis, the loss ratio for the Motor segment declined, whereas it increased for all other segments.

* On the sequential basis, the commission ratio seems to have increased sharply on account of regularization of EOM, as appropriation was seen from sales promotion expenses to commission costs (1QFY24 reported commission ratio stood at 12.5% vs. 2.3% in 4QFY23). However, the total expense ratio declined 20bp QoQ and 240bp YoY to 29.7%, better than our estimate of 31.5%.

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