IPO note on ICICI Lombard General Insurance by Ventura

Index Details ICICI Lombard General Insurance Company Ltd is the largest private sector non-life insurer in India based on the gross direct premium income in fiscal 2017, a position it has maintained since fiscal 2004 after being one of the first few private-sector companies to commence operations in the sector in fiscal 2002. It offers customers a comprehensive and well-diversified range of products, including motor, health, crop/weather, fire, personal accident, marine, engineering and liability insurance, through multiple distribution channels. The company was founded as a joint venture between ICICI Bank Limited, India’s largest private-sector bank in terms of consolidated total assets with an asset base of Rs.9.9 trillion at March 31, 2017, and Fairfax Financial Holdings Limited, a Canadian based holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management with US$ 43.38 billion of total assets at December 31, 2016.

The company takes a holistic approach to risk management, which includes data driven risk selection framework, conservative reserving and quality reinsurance. It works with it’s customers to proactively analyze and mitigate risks, which benefits both the customers and business by reducing loses and amount of claims. Leveraging technology in the non life insurance industry has enabled them to provide a seamless experience to the customers and distribution partners across all the stages of the insurance policy and achieve efficiencies in the internal operations. At the higher band price of Rs. 661 per share, the company is valued at a PE multiple of 46.2 times its FY17. Considering the likely increase in earnings and eventually the net worth, the pricing appears to be attractive.