Mumbai, Jul 22 (PTI) The pandemic has left deep gashes on the balance-sheet of the leading non-life insurer ICICI Lombard General Insurance, with its net income diving 62 per cent to Rs 152 crore for the June quarter.

Due to the second wave of the pandemic, the impact on its health segment was a whopping Rs 602 crore in the June quarter, the company said on Thursday, adding as against this, the same in Q1 of FY21 was only Rs 20 crore and Rs 339 crore for the entire FY21.

On Wednesday, life player and its sister concern ICICI Prudential Life had reported a Rs 500 crore net payout to 5,000-odd pandemic victims, while the gross payout was a hefty Rs 1,100 crore.

Gross direct premium income grew to Rs 3,733 crore in the reporting period, up 13 per cent over Rs 3,302 crore a year ago, which ICICI Lombard said was in line with the industry growth level.

The deep cuts in the bottomline arising from the health portfolio left the combined ratio, which is a key profitability gauge for general insurers, at a high 121.3 per cent in the reporting quarter compared to 99.7 per cent a year ago and 99.8 per cent in FY21, the company said in a statement.

"The combined ratio includes COVID-19 impact on health book of Rs 602 crore in the reporting quarter, as against Rs 20 crore in Q1 of FY21 and Rs 339 crore for the year of FY21," it said.

Combined ratio is the net incurred claims/net earned premium plus management expenses minus the commission on reinsurance/net written premium.

Higher payout led to a 62.1 per cent plunge in pre-tax profit to Rs 202 crore from Rs 531 crore a year ago, but was cushioned by steep capital gains from investments which jumped to Rs 244 crore from Rs 61 crore.

"Consequently, net income declined to Rs 152 crore in the reporting quarter, down 61.9 per cent from Rs 398 crore a year ago,” it said, adding this had the return on average equity plunging to a low 8.1 per cent from 25.1 per cent.

The higher payout has also narrowed down its solvency ratio to 2.76-times from 2.90-times in March 2021 but it is still much higher than the minimum regulatory requirement of 1.50x.

Ahead of the earnings, the ICICI Lombard counter rallied 4.34 per cent to Rs 1,542 on the BSE whose benchmark Sensex was on a song, surging 1.22 per cent or over 638 points after three days of sell-off.

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