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* The motor insurance industry continues to benefit from one of the strongest automobile demand environments in recent years. Auto retail sales recorded their best-ever performance in 1QFY27, growing 19%/10%/22% YoY in Apr/May/Jun'26, while industry motor premiums accelerated to 14% YoY in FY27YTD from 9% in FY26.

* Motor OD remains the key growth engine with 16% YoY growth, supported by broadbased strength across PVs, 2Ws, and CVs. With improving rural demand, the onset of the monsoon, and the upcoming festive season, we expect vehicle sales and, consequently, motor premium growth to remain healthy through FY27.

* Industry profitability remains a tale of two markets. While the industry's overall motor combined ratio deteriorated to 130% in 4QFY26 from 125% in 4QFY25, this was entirely driven by PSU insurers, whose combined ratios expanded sharply to 153%. In contrast, private insurers improved combined ratios to 115%, supported by disciplined underwriting, superior claims management, and better risk selection.

* That said, CoR within the private sector remains above historical levels (<110%) as elevated commission payouts and competitive pricing continue to offset improvements in loss ratios.

* Private insurers have increased their market share to 73%, with incremental growth being captured by agile mid-sized players such as Tata AIG and Shriram General rather than only the largest incumbents. The underwriting performance of these insurers is tighter than that of larger peers, reflecting an increasing focus on underwriting sophistication.

* Beyond the cyclical recovery, emerging drivers such as rising EV adoption and the responsibility for motor TP tariff hikes being entrusted to IRDAI serve as the key monitorables for the motor insurance segment. EV insurance policies grew ~670% YoY in FY26, creating a new premium pool characterized by higher insured values and technology-led underwriting. Looking ahead, we believe Motor TP tariff revisions, moderation in pricing competition, and enhanced underwriting discipline will represent the three most important catalysts for industry earnings.

* ICICIGI has witnessed a recovery in growth from single digits to the mid-teens since Oct’25, in line with the industry’s sharp rebound in motor premium growth in recent months, while maintaining better-than-industry combined ratios. With strong positioning in motor OD, pricing discipline, and operating efficiency, the company is well-placed to deliver steady growth (~10% OD CAGR), alongside sustained margin superiority. We reiterate our BUY rating with a one-year TP of INR2,210 (premised on 28x FY28E EPS).

ICICIGI: Reiterate BUY; growth recovery in the last three months and better-than-industry profitability ratios

* ICICIGI remains the largest private insurer in the motor segment, holding a market share of ~10.7%. Its motor OD share stands at ~13% (largest player), while the motor TP share stands at ~9% (the largest private insurer), underscoring its strong competitive positioning.

* After a soft 1HFY26 (+2.2% YoY), motor premium growth has rebounded sharply and is largely at par with industry, with 2HFY26/YTDFY27 growth at 12%/14% (11%/14% for the industry).

* As pricing discipline gradually returns, despite high combined ratios across the sector, ICICIGI’s OD premium growth is expected to improve steadily over the coming quarters. We expect FY26-28 CAGR of 10% in motor OD premiums, with stable loss ratio at 67-68% and combined ratio at ~122-123%.

* Motor TP premiums are expected to expand at FY26-28 CAGR of 12%, with opportunity for better growth if the TP rate hike is implemented. Claims ratio is expected to remain stable at 64%, with combined ratio lower than 90%.

* Apart from growing traction in retail health, we expect some semblance in group health pricing, which will support group health profitability. The company maintains a dominant position in the fire segment, but some impact will likely be faced due to aggressive discounting by peers.

* We reiterate our BUY rating with a one-year TP of INR2,210 (premised on 28x FY28E EPS).

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