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Digital initiatives on a strong footing

ICICI Lombard (ICICIGI) showcased its Digital Initiatives and underscored how it has been progressing on the journey of digitization, encompassing various stakeholders viz., customers, channel partners and employees. Key highlights are: i) IL Take Care app for serving customers with key functionalities such as quick & easy claim process, online policy renewal, access to cashless hospitals network and other features to enhance customer engagement which would help in analysing key behavioural traits – thus propelling monetization opportunities, ii) the insurer has increased 3x channel partners (60 partners from 19) over the last two years and launched iPartner pro app with automated underwriting as a key feature, iii) separate app for training, re-skilling and up-skilling of employees to improve underwriting processes. Consequently, this on-going digital transformation has materially improved turn around time, convenience, customer access and productivity at the organizational level.

Mgmt. also mentioned their importance towards customer relationships by emphasising differentiated approaches on pricing and listing on web aggregators. They aspire to be positioned on services (offerings), and do not play on pricing, hence they have premium pricing vs. peers. Similarly, they have not been aggressively working with aggregators as they want to ‘own the customer’ to create sustainable value for the organization. They believe the market has large potential and do not see any major challenges from co-existence of web aggregators, given customers want various types of interactions and different products for various needs. The insurer has decently advanced on integration with Bharti AXA platform and entire migration to ICICIGI platform will be completed in 6-8 months with benefit in PnL from this year 2H onwards

We estimate 18% GWP CAGR over FY21-24E with earnings CAGR expected to be ~20% on the back of topline growth and improving underwriting performance. Overall, we continue to like ICICIGI’s leadership position and conservative investment/ reserving approach and focus on profitable product lines. Maintain BUY with a TP of INR 1,600 (implying 32x FY24E EPS)

Digital ecosystem covering various stakeholders: As ICICI Lombard embarked on its digital journey, it has progressed well wrt turn around time, convenience, customer access and productivity at the organizational level. Some of these measurable are mentioned in Exhibit 1. It considered overall impact on organization through various stakeholders, as mentioned below:

Customers: IL Take Care app helps in quick & easy claim process, online policy renewal and access to cashless hospitals network. The app focuses on journey simplification, seamless servicing, digital engagement and value added services (VAS). Some of the functionalities to enhance user engagement and VAS are calorie consumption by scanning food, diet & exercise tracker, access to doctors, all insurance related documents, remote vehicle inspection, chatbot (for live queries), visual IVR bot (for real time submission of claims). The app is key to monetization through: i) analysing data to understand customer needs

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