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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good evening. Ladies and gentlemen, a very warm welcome to ICICI Lombard General Insurance Company Limited Q1 FY '24 Earnings Conference Call. From the senior management, we have with us today, Mr. Bhargav Dasgupta, MD and CEO of the company; Mr. Gopal Balachandran, CFO and CRO; Mr. Sanjeev Mantri, Executive Director; and Mr. Alok Agarwal, Executive Director.
Please note that any statements or comments made in today's call that may look like forward-looking statements are based on information presently available to the management and do not constitute an indication of any future performance as future involved risks and uncertainties, which could cause results to differ materially from the current views being expressed. [Operator Instructions].
I now hand the conference over to Mr. Bhargav Dasgupta, MD and CEO, ICICI Lombard General Insurance Limited. Thank you, and over to you, sir.
Thank you, and good evening to each one of you. Thank you for joining the earnings conference call of ICICI Lombard General Insurance Company Limited for Q1 FY 2024. I will give you a brief overview of the industry trends and developments that we have witnessed in the past few months. For this, our CFO, Mr. Gopal Balachandran, will share the financial performance of the company for the quarter ended June 30, 2023. India's real GDP growth recorded a stronger growth than estimates and has surpassed the pre-pandemic levels. Domestic demand conditions remain supportive of growth on the back of improving household consumption and investment activity. Although demand remains resilient with indicators such as passenger vehicle sales and domestic air passenger traffic posted robust growth on a year-on-year basis. This growth can have some impact from headwinds such as weak external demand, volatility in global financial conditions and prolonged geopolitical tensions.
For the quarter, as per data published by SIAM, the new vehicle sales continued to grow year-on-year for private car and 2-wheelers, however, the growth narrowed in the month of June this year. The growth in sales of commercial vehicle was at a double digit during the quarter. 2-wheeler sales for the quarter in terms of volumes remain below the pre-pandemic levels. Health insurance continue to remain the largest contributor to overall growth. The commercial lines witnessed growth in line with the current market environment. While the fire market has seen some rate pressures, the inherent growth remains intact.
The focus of the government on infrastructure has led to a 41.3% growth during Q1 of FY 2024 in the engineering line of business and is expected to show encouraging growth in the future as well. We remain optimistic that the industry will continue to grow given favorable macros, regulatory changes, low penetration and positive consumer sentiment.
Speaking of the performance, the general insurance industry delivered a GDPI growth of 17.9% for Q1 of this year. Overall, the underwriting performance improved with the combined ratio of the industry at 115.8% for FY 2023 as against 109.1% for FY 2022. For motor business, the combined ratio for the industry remained elevated at 121.1% for FY 2023, up from 115.6% for FY 2022. The combined ratio for Motor in H1 of FY 2022 was 123.5%, which improved to 118.8% for H2 of FY '23.
Moving to regulatory updates. The authority on June 30, 2023, published guidelines for remuneration of Non-Executive directors and key managerial personnel prescribing limits on remuneration age and tenure.
Moving to business impact for us in Q1 2024. The company grew by 18.9% as compared to the industry growth of 17.9%. Excluding crop, the company grew by 19.2% as against the industry growth of 17.4%.
Coming to the growth for key segments during the quarter. In property and casualty lines of business, we grew at 17.0%, which is higher than the industry growth of 7.8%. Further, during the quarter, we accreted market share across all segments such as fire, marine, engineering and liability. Discontinuation of the IIB rates had a moderate impact, which is in line with our expectations. However, we will continue to monitor the development in coming quarters.
In motor, the growth was tepid at 5.3% for the quarter, while we grew at 10.8% in June. While we witnessed -- further we witnessed month-on-month growth in new private car segment during the quarter, with no motor TP price hike, we have rebalanced our portfolio, resulting in our commercial vehicle mix at 21% and 2-wheeler mix at 30.3% for Q1 of '24.
The health segment continued to be the fastest-growing segment for the industry. During the quarter, we grew at 40.4%, which was higher than the industry growth of 20.7%.
In group health employer employee segment. The change in underlying industry pricing sentiment resulted in customers moving towards customers -- companies with better underwriting and service capabilities, resulting in our group health segment to grow by 43.9% during the quarter.
As a result of our continued investment in retail health distribution, we have outgrown the industry growth of 18% in Q1 '24 with a growth of 22.8%, this was driven by business sourced through retail health agency vertical growth of 25.6%.
I would also like to share that our one-stop solution for all insurance and wellness need, ILTakeCare app has surpassed 5.6 million user download till date. The incremental download for the quarter was close to 1 million. For Q1 of this year, the premium source through ILTakeCare contributed INR 588.0 million, to the GDPI, reflecting a 5x year-on-year increase.
Our Bancassurance and Key Relationship Group grew at 27.3% this quarter. Post-pandemic, steady credit growth, along with deep mining and increase in wallet share and distribution partners has been the key growth driver. Our business sourced through our Digital One team grew by 24.7%. Overall, our digital focus has enabled us to increase our digital revenues, including ILTakeCare app revenues to INR 3.12 billion, which accounts for 4.9% of our overall GDPI for the quarter.
We continue to make significant investments in modernizing our technology architecture. After moving to the cloud in FY 2022, we modernized a number of our front-end applications. Being on the cloud and transitioning to cloud native has led to increase in reliability of our technology platforms as evidenced by the reduction in error tickets by close to 71% this year -- in the last year. At the same Time, we have seen an 86% reduction in response times across some of our Digital channel partnerships. Our Responsive Intelligent Assistant, we call RIA, our ChatBot, has enabled our DIY adoption by 3.4x over a 13-month period. Alongside transitioning to the cloud and modernization, we completed the migration of applications and data from the erstwhile Bharti AXA data center to our application platforms and cloud data center in just 14 months. We believe this was one of the fastest migrations of this scale in the Insurance industry globally. We also continue to remain focused on leveraging our digital capabilities and building claims efficiency. Case in point towards motor claim settlement process, we introduced Cloud calling features, enabling over 2 Lakh customers during the quarter to connect seamlessly using a dedicated virtual number. 81% of our customers filed e-claim form in Q1 '24, up from 67% in Q1 of last year. In Q1 '24 through our PPN network, the preferred payment garage network, we were able to service 60% of our non-OEM claims, up from 40% Q1, '23. Resultantly, our overall NPS for non-cashless claims improved from 62% for the YTD May 2023, up from 42% for Q1 of '23. Also NPS of cashless claims increased -- improved to 68% for YTD May '23 up from 60% in Q1 of last year. To conclude, I would like to summarize that we are well positioned for the future. We remained focused on growth levers, such as innovation, digital advancements, launching new products, strengthening our distribution engine, rationalizing cost while scaling up our preferred lines of business.
I will now request Gopal to take you through the financial numbers for the recently concluded quarter.
Thanks, Bhargav, and good evening to each one of you. I will now give you a brief overview of the financial performance of the company for Q1 FY '24. We have uploaded the results presentation on our website. You can access it as we walk you through the performance numbers.
Gross direct premium income of the company was at INR 63.87 billion in Q1 FY '24 as against INR 53.70 billion in Q1 FY '23, a growth of 18.9% against the industry growth of 17.9%. Excluding crop, GDPI growth of the company was at 19.2%, which was higher than the industry growth of 17.4% in Q1 FY '24. Our GDPI growth was primarily driven by growth in the preferred segments. The overall GDPI growth of our Property & Casualty segment grew by 17% at INR 22.86 billion in Q1 FY '24 as against INR 19.54 billion in Q1 FY '23. On the retail side of the business, GDPI of the motor segment was at INR 18.75 billion in Q1 FY '24 as against INR 17.82 billion in Q1 FY '23, registering a growth of 5.3%.
Our agents, including the point-of-sale distribution count was at 117,149 as on June 30, 2023, up from around 113,000 as on March 31, 2023.
The advanced premium was INR 32.63 billion as at June 30, 2023, as against INR 32.17 billion as at March 31, 2023. Resultantly, combined ratio was 103.8% for Q1 FY '24, as against 104.1% for Q1 FY '23. Excluding the impact of cyclone losses of INR 0.35 billion, the combined ratio was 102.9% for Q1 FY '24.
The technical reserves, which are presented as a part of the reserving disclosures are not discounted as per the current regulatory framework. However, globally we understand technical reserves are presented on a discounted basis. If we were to discount the technical reserves, particularly for the long-tail businesses such as motor third party, which constitutes around 80% of our total outstanding and IBNR reserves.
Our current reported combined ratio of 104.5% for FY 2023 would look better by around 400 basis points. Our investment assets rose to INR 449.05 billion as at June 30, 2023, from INR 431.8 billion as at March 31, 2023. Our investment leverage net of borrowings was 4.16x as at June 30, 2023, as against 4.15x as at March 31, 2023. Investment income was at INR 8.23 billion in Q1 FY '24 as against INR 6.55 billion in Q1 FY '23. Our capital gains stood at INR 1.23 billion in Q1 FY '24 as against INR 0.32 billion in Q1 FY '23. Our profit before tax grew by 11.8% at INR 5.2 billion in Q1 FY '24 as against INR 4.65 billion in Q1 FY '23. Consequently, profit after tax grew by 11.8% at INR 3.90 billion in Q1 FY '24 as against INR 3.49 billion in Q1 FY '23. Return on average equity was 14.7% in Q1 FY '24 as against 15% in Q1 FY '23. Solvency ratio was at 2.53x as at June 30, 2023, as against 2.51x as at March 31, 2023, continues to be higher than the minimum regulatory requirement of 1.5x. As I conclude, I would like to reiterate, we continue to stay focused on driving profitable growth, sustainable value creation and safeguarding interest of policyholders at all times. I would like to thank you for attending this earnings call, and we will now be happy to take any questions that you may have. Thank you.
[Operator Instructions] We have our first question from the line of Prayesh Jain from Motilal Oswal.
There's a few questions. Firstly, could you talk us through the loss ratio like ex catastrophical, what would be the loss ratio and where is this loss ratio kind of setting. So if I look at the group health loss ratio, or your total health loss ratio is at 78.7%. Could you split that up for us in terms of core retail health -- and with this catastrophic loss exactly sitting in which line item? With all the segments?
Prayesh, insofar as the breakup of the overall held loss ratio numbers that you see, which is 78.7% for Q1 FY '24. The breakup of that for employer-employee or the group health is at about 92.6%. The retail indemnity business is at about 64.2%. So that's the breakup for the overall health. And to your other question in terms of where is the impact of cyclone losses largely sitting upon, it is predominantly in the property and the casualty line of businesses, which is in the fire and engineering line of businesses predominantly. A very small proportion of claims is there in motor, but predominantly a large part of the impact on the cyclones, fire and engineering. The combined impact, that's what we gave as a part of the opening remarks. For this quarter, the net impact of claims on account of cyclone losses has been about INR 35 crores.
Okay. Any reason for the very high loss ratio on the group side, is there a spike in terms of number of claims or frequency or similarity?
No specific -- in general, if you see what we have been speaking about, Prayesh, even in the past on the employer-employee segment. Generally, we have spoken about the loss ratio to stay in the range of around that 95% kind of threshold between 90% to 95%, or primarily comprises of 2 books at what we have spoken. One is relatively large cost rates, which kind of runs at a loss ratio anywhere ranging between 95% to 100%. And then we have that relatively SME, which is a small in the mid-corporate portfolio, which runs at the loss ratio experience between 90% to 95%. So on balance, historically, we have run the book at a loss ratio, as I said, around the 95% threshold. Currently, for the quarter, as I said, the number stands at about 92.6%. So hence, to that extent, no specific changes when we see in the context of whether, let's say, an increase in frequency or increase in severity with respect to claims.
Actually Prayesh, if you look at our last year full year, group health loss ratio, that was roughly about 95%. If you look at the current quarter is actually lower. We don't see any significant pressure on the health loss ratio side. Retail has been performing well and group health because the cost of acquisition is low. This is typically where the losses show lie.
Got that. And coming to motor segment, some -- again, some profitability perspective and the mix that you have change of mix that you've spoken about to going away from commercial vehicles, would that be a strategy for FY '24, or from a longer term perspective? And secondly, could you talk about like, for many quarters, we've spoken about some green shoots on the OD pricing, but that's not really reflecting very heavily in terms of numbers but you mentioned about the industry loss ratio kind of combined ratio kind of improving between first half and second half. Is there any more bigger trends that you see further improvement? Or it's just kind of getting arrested at the current levels?
So on the first one, commercial vehicles, I think some of the granular calls that we took, certain strategic costs that we took over the last 2 to 3 years, which we've talked about. I think we are kind of staying invested with that. The bit of rationalizing that we did was because the TP price hike this year didn't happen. So with our estimate of inflation, as we've already always talked about, then certain marginal portfolio is becoming unbearable. Having said that, if you see our 21% it's still higher than what our traditional TP market mix has been, which is about 15%, 16% and our sense is that we are not planning to reduce it significantly, it will probably be in the similar ballpark 20-plus minus. Coming to your question on OD, again, if you look at this quarter loss issue for us in the OD compared to last year, you see an improvement. Having said that, the expectation that we've had is some of the aggression on sourcing side, given the expense of management will cap the flexibility to some of the play. We were expecting some more rationalization, some more improvement. At this point in time, we've not seen it. But I think we're kind of reached a level where we've -- I doubt most of the marginal portfolios. So most of the pain is behind us, as we think.
Gopal, just last question from my...
Mr Jain, I request you to join back the queue, sir. [Operator Instructions] We'll take our next question from the line of Sanketh Godha from Avendus Spark.
And my question is around the motor area business. If I look at the numbers, consistently, it has been improving from second quarter or first quarter of FY '23. That number is around 67, so just wanted to understand that this number of 67 is sustainable or actually I want to understand more in detail what corrective measures you have taken so that -- except for the choice of not seizing the market share which has led to the improvement in the loss ratio in the motor segment -- all the segment rather -- that's one thing. And second, I just wanted to, again understand if it's the ILTakeCare app, which you said today, today probably contributes almost 1% in of your GDPI in the quarter 1 you have done -- so I want to understand how you see this channel to be a cross-sell upsell channel, which products and how much it can potentially contribute to the entire GWP standpoint.
Sanketh, on the first question on motor OD side there are multiple things that we've been doing, and as I think we've been saying that a lot of heavy lifting we did last year. One is the selection. The marginal portfolio we let go. That has an impact. So our sourcing, which is the target loss issue in the source of business that is also a compound. The second is on claims side, there's been a huge amount of effort that we have done more in terms of -- some of the abuse that were -- that generally happens, but we believe had picked up post-COVID -- so on the claims control, we've done a lot of work on using data analytics to reduce waste and abuse. Thirdly, we talked about the percentage increase in PPL. That also gives us some savings on the claim side. So there are multiple initiatives that has happened and it is foreseeable, again, we'll have to wait to see market conduct, but we are reasonably hopeful that we should be able to sustain this at this current level.
Coming to your point on ILTakeCare, the numbers that we gave out, is about 5x of last year's similar number for the quarter. But in aggregate for the company, even if we add this ILTakeCare number to the overall digital business, as we said it's about 4.9% of our total business. Let's say ILTakeCare contribution for this quarter was about INR 58 crores, INR 588 million. So it's a material number as yet, but we believe this is actually helping us at multiple levels. One is customer engagement, retention, we see some loss -- better loss issue for clients which use ILTakeCare. In group levels, we see a better retention of profitable accounts in the corporate side and we're looking at how we can use that further in terms of it strategically -- in terms of increasing cross-sell and upsell. That's work in progress. But still, honestly, in terms of aggregate numbers, we are very heartened by the scale. The speed at which it's picking up, but still small in the overall scheme of things.
Bhargav, there's just one clarification. If ILTakeCare App, you're able to manage cross-sell predominantly a retail health of INR 58 crores or INR 59 crores? Or it is other products also, you have seen retraction?
Because of mix of products. You're seeing 2-wheelers, we are seeing health. We are seeing more -- private car. We are seeing employees of corporate buying policies on their own. So it's a mix of most products that we have there.
Got it. And finally, last one, Gopal, if you can explain the reason why the commission cost has boosted? Overall expense has not changed but commission costs have gone up, but the expense has come down. So you have seen that EOM impact already visible with respect to shifts from advertising cost to be commissioned?
So I think, Sanketh, if you recollect taking the way, we have always talked about this, I think we look at the businesses from an overall combined perspective, because as we keep saying, there are different models of sourcing that exist in the market. I mean there are segments which are relatively run on high LR and low expense of management and the other way around. So which is -- what now when you look at, let's say, even from a quarter 1 perspective, I think I would kind of always keep urging to look at it more from an expense of management standpoint rather than looking at any breakup around that. So if you look at the overall expense of management in terms of the breakup of the combined ratio that we reported over about 138% for quarter 1, of which -- the loss ratio was about 74.1% and the balance, which is almost about 29.7% is the expense of management number.
This, if you look at it for quarter 1 of last year, the expense of management number was about 32.1%. And again, when you look at it, even vis-a-vis quarter 4. Quarter 4, the expense of management number was about 29.9%. So even on a sequential basis, I think we have seen an improvement in the overall expense of management. And even on an year-on-year basis, I think, clearly, the there have been an improvement in the overall expense of management. That's the way we would want you to look at because we've said, there are different models of sourcing that exists. And as a company, that's what you would want to kind of look at.
We have a next question from the line of Nidhesh Jain from Investec.
Firstly, if you break the regulatory business, so what percentage of the business is coming from our own website plus ILTakeCare? And how are the trends in that segment on Y-o-Y basis?
So if you look at the way we manage this business, there is the digital one team, which looks at -- if you remember, we had said there are 2 objectives that we have. One is the set business growth, and the other is working with the digital ecosystem partner. And we look at it together, that growth for this quarter is about 37.8%. The ILTakeCare number as we said is relatively small, but that grown from a small base at 5x, it's 400%.
If you look at the annual disclosure, I think, last year in the public disclosure, the data indicates that the growth from our own website has not been that strong. It has been flatting out, growth is largely coming from the digital ecosystem. So are those trends continuing in this quarter also or -- and because the business coming from our own website would be much more better quality, low -- much more profitable probably over a period of time. So how do you think about the strategy and the digital side from sourcing business from our own website.
Sorry. So Nidesh, this is a combination of both -- Nidesh. So obviously, we look at -- all of them are preferred channels of sourcing, whether you look at business through website, business through alliances and even, let's say, the ILTakeCare opportunity as what Bhargav explained. For us, all the 3 segments of growth, whether we look at it from a website standpoint, whether you look at it even from an alliances standpoint, in fact, during the quarter, we have further strengthened the number of alliances tie-ups that we have, and that's the reason why that part of the business has done phenomenally quite well. And overall, as we said, the digital one contribution in terms of revenue for the company for this quarter is around and about 24.7%.
Secondly, last year, we put out a strategy that we will focus on higher loss ratio and low OpEx ratio business in the motor OD segment, so how -- while if you look at that -- loss ratios have improved quite a bit. And OpEx ratio has also seen some improvement. So how is the trend there, how the share of that business is shaping up on overall motor GDPI?
See again, it's a combination of both, Nidhesh, is what I would say. I think what we put out as a part of our opening remarks, I think for us, if you look at this particular quarter, I think the growth on new private car has kind of come back, which is kind of exhibited when you look at it sequentially on a month-on-month basis, I think growth in new private car seems to be kind of doing well. Having said that typically also comes with a relatively better loss experience. Having said that, I think we are also kind of increasingly focusing on exactly the point that you mentioned with respect to focusing on relatively older vehicle segment, which also comes with a relatively high LR and let's say, a lower cost of acquisition. And that's again reflecting also in the expense of management numbers. And if you recollect what we have been talking about historically, our proportion of motor business coming in through the OEM channel of contribution used to be in the range of 75% to 80%.
Increasingly, that proportion of contribution of business of motors coming in from, let's say, the OEM channel distribution, it will be in the range of about 60%, 65%. So directionally, I think what we have been trying to do is to balance the overall portfolio between contribution from OEM dealership agency as well as the earlier point that we made in terms of the digital opportunity that one sees.
We have our next question from the line of Shreya Shivani from CLSA.
I have two questions. First is on the motor segment, total motor segment. So -- if I compare Lombard's both loss ratio and growth across the private peers, I would specifically look at the private general insurers. So many of them would have just a few percentage point higher loss ratio on this segment, but they're delivering about 15% growth in this quarter as per the [indiscernible] data, so what can we expect for Lombard Motor segment for the full year? And any guidance on the overall premium growth for FY '24, that's the first question.
And the second question is on the crop loss ratio. It seems a little higher at more than 100%. And last year, I remember you guys had shared that the crop program that you had participated in was the 80, 120 capped plan, something like that? So if you can help us understand that as well.
So the second part is -- I'll kind of answer that, Shreya. So in general, if you recollect, obviously, the claim development cycle takes time. And that's the reason -- from a conservative standpoint, whenever we book the revenues -- given that we don't have complete experience of loss development, we end up providing it on an 100% loss ratio basis. So which is why when you look at that number, you will find the loss ratios to be bit elevated but when you -- when the actual experience starts to kind of play out, you will obviously start getting that reflected on actuals. So hence, we -- and typically it roughly takes about 2 quarters for the loss development to play out in the crops segment. So as and when we get to see the impact of the cycle, we will kind of actualize those numbers.
To your first point on what is it that we can expect on overall growth for the company as a whole. I think in line with what we have spoken, as we always keep saying, the market needs to get better in terms of pricing. At this point of time, we should have seen for quarter 1, I think we have had almost close to almost about 200 basis points outperformance relative to the market growth numbers, when you look at extra crop. And so that's clearly the expectation that we have as a company.
We have the necessary strength in so far as distributions, claims, service and technology is concerned. And hence, to that extent, from an overall market standpoint, we would obviously want to expect us continuing to have similar kind of outperformance. Now within that, to your first point on how does one see on motor. As I said, again, when you look at it on a sequential basis month-on-month. I think clearly, we have been able to possibly arrest the extent of de-growth that we had seen in that particular segment. So for example, in April, we had a de-growth in motor. For the month of May, we had a positive growth of about 5%, and for the month of June, we had a growth of almost about 10%. So sequentially, I think we have been able to kind of get better and the extent of gap between the industry growth numbers and let's say the growth that we have been exhibiting is kind of getting narrowed down.
So that, again, I think -- and so the only thing that we would watch out for to your point on what we could expect for the rest of the year is the adherence to the extent of management guidelines that come into force from this year. In fact, I was -- when we were looking at the FY '23 number that's now out for the entire market as a whole. Almost close to 2/3 of the industry participants have their expense of management number greater than the regulatory prescribed limit of 30% or 35%. So this clearly causes for an action, which is what I presume even the regulator would be significantly putting a focus on once all companies start putting out their Q1 numbers, I'm sure they will start looking at the expense of management numbers for the overall market as a whole. And within that, each individual companies in terms of how they are exhibited, and once some of these things starts to correct over the period of time. Obviously, as I said, just so far as our positioning is concerned, I think we should be able to kind of see a relatively better growth even in motor asset category.
Comments that you had in terms of the loss ratios. I think as we've been gaining this for some time. That when you look at motor, if you will split the loss ratio with own damage and third-party. You see turning patterns. I mean you can do the analysis yourself. And in third party, again, if you do a bit deeper dive on the reserving picture, which is now available to all of you, you'll be able to figure out the reserving practices. And that will probably throw some light on the loss ratio numbers of some of the players in the market.
Got it. Got it. Sir, one just a clarification I wanted. The retail indemnity loss ratio that you mentioned at 64.2%. This is 64.2% for the retail indemnity sold by agents or the ones which is the one which is getting sold by ICICI bank?
No about the group [ strategy ] which has retail indemnity is the individual retailing committee.
And what is the loss ratio of the ICICI bank portion that is getting sold by ICICI Bank?
That's a level of detail. That's not fair on the distributor also.
We have our next question from the line of Rishi Jhunjhunwala from IIFL Institutional Equities.
Just a couple of questions. Firstly, on the health side. So can you tell us -- in the retail has the 22% year-on-year growth that we have seen. How much of that is driven by pricing increase that you have taken in February?
And secondly, on the corporate side, there is a significant growth that has come here -- is that being driven by the normal health plans or there is a large component of -- the credit protect plans also which are coming here, and is that the reason why unexpired risk reserve has shot up quite significantly for us in this quarter?
So on the second part, Rishi, to your point on the -- while on the -- I'll just kind of talk about the commercial lines of the category and within that, and I will talk about your corporate health -- or, let's say, the group health point that you wanted to understand. Across commercial lines, I think we have actually been able to exhibit significant market share as what we kind of also put out as a part of the opening remarks. In fact, relative to an industry growth of which is single digit, 7.8%, our growth has been about 17%, and this spans across fire, marine, engineering, liability, et cetera, et cetera, across the key commercial line. And there, the growth is aided by -- across all factors, which is -- it is driven by volume increase, it is equally driven by I would say, accretion of market share. And specifically now also in the context of corporate health, we have also been able to see accretion in pricing as well. So it's been an all-round kind of growth that what i'm seeing in the overall commercialized portfolio.
To your second point on now within the group health or lets say within the corporate health, again, it's been a combination of both. We have -- as you would kind of recollect some of the participants in the market had exhibited significant underwriting losses, particularly in the corporate end space. And there have been clear instructions that they have given to their respective operating offices to get better on underwriting, that exactly is what we kind of wait for is opportunities for us to kind of drive businesses because, as I said, we have the necessary back-end strength in terms of distribution and, let's say, claim service to our advantage. So hence, we have been able to gain upgrade market share, from some of those companies came to us where customers start to look at more in terms of service as the basis of placing the risk. So hence, the growth is aided by accretion in market share. Again, volume, we do see in some sectors, incremental hiring being done by some of the corporates concerned. And to that extent, it is also volume-driven. And three, it's also a function of, as I said, the relative overall growth that one has seen.
Health is also aided by I would say, reasonable growth even in the Bancassurance space as we had kind of put out given at the part of the opening remarks. Our Bancassurance, which comprises of distribution through banks and our key relationship group partners. That's again done reasonably well at almost about 27% growth on the back of, again, a reasonable growth coming back in terms of credit disbursements. What one would watch for is obviously the extent of disbursement levels actually heading to the subsequent quarters. I think that we will wait for it in terms of how the development takes place.
Understood. And second question, why did you explain about the expensive management thing and that to look at on an overall basis, and that's anyways what we are going to do. But just from a purpose of understanding, I wanted to understand the change in commission and the business promotion. Is it purely a reclassification issue from books of accounts perspective from the way you're now paying to the distributors? Or is there any actually on-ground business model changed also?
You ask us -- as we always keep saying, Rishi, I think at the end of the day, we always look at the overall cost of acquisition in terms of the way we kind of do businesses. And that's the reason why I kind of specifically put out that number in the context of expense of management. And that's what I would urge to kind of look at. And honestly, the kind of split between what constitutes commission, what constitutes, let's say, in our overall operating expenses. All of them are based in as a part of our operating model. Fundamentally, if you ask us, have we changed anything so far as the underlying way of doing business? Honestly not. There is no specific change that one has kind of done. And hence, which is why I'm saying that once we start looking at the numbers more from an expense of management standpoint, rather than trying to look at split between how much has been the growth in commissions and how much has been the changes in operating expenses.
We have our next question from the line of Avinash Singh from Emkay Global.
Two questions. So first one is more on commercial lines, your particular fire engineering, so there were sort of multiple factors affecting the pricing and all. So just -- I mean if you can give some color on that addressing for your cyclone losses, if there has a sort of an impact on overall of claims ratio because of the pricing environment? Or if you can quantify also the price changes effectively that happened in this quarter? So that's on commercial line.
Second on group health employee, employee part. If you can provide some sort of either quantify or some qualitative disclosure in terms of how has been your experience on the business that you have initially acquired a pre-COVID period and continue to renew, I mean, besides hikes, and the business you have acquired, say, last year. So are there sort of a difference in terms of the claims experience in these 2 sets. This will be our 2 questions.
So let me take the second one, and Gopal can give you the split of, let's say, the commercial lines business. In the aggregate commercial lines business, there has been some softening on the fire side for the reasons that we've been talking about, which is that the IRB rate is no longer there. But it's well in line with our estimates. So it's a single-digit change not a material reduction that we have seen in the first quarter, but we'll have to be watchful of how this progresses for the rest of the year. But til now, it's largely been in line with expectations. The difference in the loss ratios for fire and engineering without -- with and without fact, Gopal will answer them separately.
Coming back to your question on group health, Avinash, I think the real good news for us was that the accounts that we had pre-COVID. We've been talking about this in the past as well. From July of the year after the fist second wave, we started increasing prices by between 15% to 20%. And we used to see almost more than 90% retention of the large accounts. So I think the service proposition that we've delivered, the various features of ILTakeCare, et cetera. I think overall, we've had good experience in terms of retaining these accounts.
This year, for the reasons that Gopal explained, we are seeing a good traction in business moving from some of the other companies that's coming in. The way we are pricing it is, again, in line with our general practice of being disciplined about underwriting. So the question then is that will these then also renew next year if prices go down? That's we have to wait for. What the approach that we take is even when we go in with any of these accounts, we have sources to look at customers who are not price seekers every year who switched from 1 company to the other. But to look at companies who've generally been stable with 1 insurer for some time. Maybe who would be wanting to move now because of service experience or because pricing has significantly gone up and come close to our numbers, and we are able to get a slight premium over the market place. So on balance, I don't see a big difference within the accounts that we had in the past to the accounts that we have gotten now. On the [indiscernible].
Yes. Avinash, to your point on what could be the potential impact on some of these pricing-led changes and, let's say, cyclone led impact. As Bhargav said, I think so far as the price decline, it's a single digit number, roughly in that range of, I would say, between 5% to 7% kind of decline in pricing, it's what one had seen, and that's what expected lines. That's what we had mentioned even during the April earnings call at the time when the guidelines had come into post. Which is the reason why you will see for overall market, fire growth for quarter 1 is far more tepid at, let's say, at 5.9% or 6%.
Even -- despite that, if you look at for ICICI Lombard, we have again had an outperformance in that category. We have grown at almost about 10% in fire as a line of business, so that's the impact and so far as pricing is concerned. On the other part, what we discussed even in the April earnings call, if you recollect, is also the hardening of reinsurance rates, and that for to that extent we also has seen an improvement -- increase in the [indiscernible] cost. What effectively happens is the NEP does a catch-up because typically your cost of [indiscernible] starts [indiscernible] quarter 1 and as the book kind of growth, the earnings play through over the remaining quarters. So now when you look at the loss ratio, what is put out in the investor debt for fire, let's say, about 85% for quarter 1 and let's say 98.6% for engineering. Now this has the impact of the [indiscernible] cost. It also has the impact of, I would say, losses from cyclone as what I kind of mentioned. Very difficult to kind of separately call out the impact of the [indiscernible] cost. But if I were to just exclude the impact of cyclone losses, the loss ratio on fire, which is at about 85% will look like about 64%, 65%. And engineering, which is looking like about 98.6%, it will look like about -- close to about 80%, 82% in that range. So that's the kind of numbers that one sees in so far as excluding the [indiscernible] losses are concerned. But as I said, Q1 particularly for engineering, it's relatively more long tail as the projects start to kind of build over a period of time is where you will see a relatively larger proportion of earnings coming through. And then to that extent, you will always find possibly the Q1 loss ratios to be a bit more skew.
Okay. So I mean, on group health, broadly, I can expect that the 90% broadly is for your old book as well as your new book. I mean, there is no different experience.
I request you to join back the queue, sir. There are other participants waiting. We have our next question from the line of Swarnabha Mukherjee from B&K Securities.
So a couple of questions. First, on the retail health. So sir, you mentioned around 64-ish loss ratio in the retail indemnity portfolio. I was just wondering that -- historically, you have told that you have run this book at around loss ratios of between 65% to 70%, so is there a possibility that will push the pedal a little bit more in terms of growth going ahead? So that we are in between that mark because profitability-wise, I think we are much better than where we were running the business. So whether we should expect to see growth panning out at a faster rate and much, much more higher than the industry given that our market share is still lower than what our company average market share is across category. So that is the first question on retail health. And on the second question on the fire loss ratios, you pointed out that there are [indiscernible] losses that are [indiscernible] right now. Just wanted to understand that -- is there -- given that the elevated loss ratio that you have reported, if we were to remove the impact of [indiscernible] losses also, should we also see some element of that deregulation playing out in loss ratio in terms of a dominator would be lower from the pricing point of view? And thirdly, on the crop premium for the month of June, I think there was a sizable crop premium. So that pertains to Maharashtra and of a similar structure of what it was done last year? So that will be...
Let me add to the fire, let me take it, and I'll ask Gopal to cover the rest. As Gopal explained, the loss issue for those 2 businesses look a bit elevated. But we are very comfortable and very happy with the book. As we explained, a big chunk of that incremental loss ratios because of [ CAT ], which happens once in a while. Secondly, the price softening has had a 5% to 6% impact, not as big as one was worrying about. So in that sense, it's a positive. Third is the [indiscernible] cost is an upfront cost. As we go through the year, the NEP keeps accreting and the [indiscernible] cost gets spread over the whole 12 months. So the Q1, it looks elevated because it's a smaller book which is kind of absorbing that increment. So to overall, our property and casualty business, we are very happy with the way things are progressing, just to give you an overall sense of where we see the business.
Follow-up on that, the price softening part that you mentioned, 5% to 6%. So in that scenario, if the reinsurance market kind of softens next year from where it is -- can it -- as the softening can be more?
This is getting to realms of speculation. Too many factors are unknown in terms of global reinsurance markets. So there's no point in talking about it right now. Maybe we can discuss this post-January 1.
Add to what Bhargav said, Swarnabha, I think one is -- I think as we keep saying, I think which is what is there in the numbers we could have seen on the overall basis. While we said our growth in revenues has been, let's say, close to about 19% [indiscernible] of crop. If you would have seen the growth premium -- net written premium has been almost about 23%, which is a function of let's say what we retained and what we kind of reinsured. But relative to that if you would have seen the growth in NEP has been only about 12%. So that's the catch-up that will start to happen. And this is not just specific to any particular segment. I think for across segments, when we kind of exhibit growth, you will start seeing NEP doing a catch-up over the subsequent quarters. So which is what you should kind of watch out for. And as we always keep saying, for us, you should ideally look at outcomes over years, if not ideally on a financial year basis, definitely not quarters. I mean, quarters will have lots of elements attached to it. And again, we will urge everyone keep looking at numbers more on annual basis ideally over years because that's how the insurance cycles typically work. So that's just an addition to what Bhargav said.
To your third point on the crop, I think pretty much similar to what we have been talking, which is even the one that we have one in Maharashtra, that again operates under the 80:110 model which is where we are kind of clear about what kind of risk that we want to undertake. And two, as we have discussed even during the April call, potentially there is an expectation that this year could be in a year of [indiscernible] and then to that extent, again, from an exposure standpoint, I think we would want to be a bit guarded. And even otherwise, what we have said even earlier as well, on crop, relative to our overall numbers, I would definitely want to see that less than 5% of the aggregate annual revenues. So that stand kind of pretty much remains the same.
To your first point on the overall retail health loss ratios, again, I mean this is quarter 1 numbers, right? I think the range that we gave is the range that we are comfortable to kind of operate with as a segment. And what we are quite happy and excited about is the fact that even if you look at consistently since, I would say, second half of last year. And even for the whole of, in fact, FY '23, we have had outperformance on retail health visibility market. I mean, if you recollect, for FY '23, our growth was almost about 17%, industry on retailers grew at 15%. Even quarter 1, when you look at the numbers for us, individual or retailers grew at almost 23%. Market growth was about 18%, 19%. So again, we have an outperformance relative to the overall market. The good news is even when you look at it in the context of stand-alone health companies, our growth in quarter 1 has largely been in line with the stand-alone health growth number as well. So hence, to that extent, whatever investments that we are doing on retail health, we are quite excited with the way how the investments have played out. And that's the reason why you already start to see some small levels of increase in market share that we have seen, which used to be sub-3%.
Right now, we are at about close to about 3.1% in market share -- in the retail health indemnity [indiscernible]. Of course, as you rightly said, there's a lot of catch-up that we have to do. And hence, to that extent, we will continue to stay invested in building that distribution force. And loss ratios, as I said, will be more an outcome and the range is what we kind of largely talked about. Q1, honestly, again, very difficult to comment on 1 particular quarter. You have to look at it more on a full year basis.
Understood, sir. Can you squeeze in a question on group just...
I request you to join back the queue, sir. We have a next question from the line of Prakhar Sharma from Jefferies.
And congratulations to all of you. Just wanted to get a pulse of this flooding in the northern Indian parts. How big is the business? How should we kind of -- assess any potential loss, that's part one. And just wanted to get a sense on the full year and next year combined ratio expectation. Are we just sticking to our earlier guidance. So these were my 2 questions.
So the second one is easier to answer, yes, we are sticking to it. In spite of these losses that [indiscernible] losses that we had in this quarter and the North Indian floods will come in the Q2 because these were not -- I mean even now as we speak, the losses are coming in. Till now, it doesn't look to be significantly an area of concern. But it's too early to call, Prakhar, I think what happens in the floods is that it takes some time for the customers to come back and report all the claims. So I don't want to give a false comfort that is a low value [indiscernible]. We'll have to wait for some time. But whatever it is, as a company, unless these losses are significantly out of think with the past experiences. I think will be -- we are clear that we are staying within the same guidances levels that we've talked about.
We have a next question from the line of Neeraj Toshniwal from UBS India.
So given we have seen some improvement in [indiscernible] in motor, which is quite impressive, I wanted to understand the outlook going ahead? And are we seeing some kind of pricing improvement which has happened, due to expense of management changes and no hike in motor TP pricing for this year?
As we said on the second point, not much, we had expected some more improvement because of expensive management constraints. We've seen some bit of correction in terms of certain elements of PA price, et cetera, for these sectors. So a lot of companies have into some element of the pricing, but it's not to the extent that one had expected. Given the expense of management as Gopal explained, for a large number of companies in the sector, they are over their limit, as of now, we've not seen a change. But as we explained, we will have to see what happens after quarter 1 and how the regulator looks at industry numbers and company-specific numbers, so we will be watching. From our perspective, we are well within the limit. We have a big cushion, but that doesn't mean that we are going to be profligate. We are focusing on building a [indiscernible] business.
So what kind of growth in motor portfolio we are kind of now -- given the momentum is coming back, we are building in?
I think as I said earlier, I think the difficult part is behind us is what we think. So our expectations is that we should definitely go in line in the market for this quarter.
Got it. And last question is on the tenure, which you just mentioned in the opening remarks, with the guideline with some regulator. Any incremental color on that?
So Neeraj, I think this is something that we have been talking about earlier as well. So obviously, at an appropriate point of time. I think as we keep saying, sufficient planning is something that actively gets discussed at the BNRC and at the Board levels, across management levels. So maybe at an appropriate time. I think we will come back. If at all, where we have to make any necessary announcements.
Got it. And one last question on the ICICI Bank [indiscernible] by which it'll be happening over some time, had any proceeding or approval from the regulators happened? Because there's no update on these [indiscernible] on that number?
I think they will announce it whenever they're ready to announce it, we too will have to wait for -- to get all the approvals, but they've got enough time to do the same. As of now, there -- we're awaiting all clearances from the regulator.
Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Bhargav Dasgupta for closing comments. Over to you, sir.
Thank you. Thank you, everyone, for joining and look forward to be interacting with you over the next few days, feel free to reach out to us. Thank you again.
Thank you so much.
Thank you. On behalf of ICICI Lombard General Insurance Company, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.