In a significant development for India’s insurance sector, ICICI Lombard General Insurance Company Limited has received a positive outlook revision from global credit rating agency AM Best, while its existing credit ratings have been affirmed.

The rating agency has revised the company’s outlook to positive from stable and reaffirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb+” (Good). Additionally, the agency has reaffirmed the India National Scale Rating (NSR) of aaa.IN (Exceptional) with a stable outlook.

This announcement marks an important milestone in ICICI Lombard rating upgrade news, highlighting the insurer’s strong financial fundamentals, robust operating performance, and effective risk management framework.

The development has been formally disclosed to the stock exchanges under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency for investors and stakeholders.

Positive Outlook Signals Strong Future Growth

The decision by AM Best to revise ICICI Lombard outlook to positive from stable reflects the rating agency’s expectation that the company’s balance sheet strength will continue to improve over the near to medium term.

According to the agency’s assessment, the company’s financial profile is expected to remain strong due to:

• Robust capital generation

• Effective capital management

• Strong risk-adjusted capitalization

These factors collectively support the insurer’s long-term stability and growth prospects.

AM Best also highlighted that the company’s risk-adjusted capitalisation is expected to remain at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR).

Such metrics are crucial indicators used by credit rating agencies to evaluate the financial resilience and solvency strength of insurance companies.

Affirmation of Financial Strength Rating B++

The Financial Strength Rating (FSR) of B++ (Good) reflects the company’s ability to meet its insurance obligations and maintain financial stability under various economic conditions.

This rating indicates that the insurer has:

• Strong capital adequacy

• Solid financial resources

• Effective operational management

The affirmation of the ICICI Lombard Financial Strength Rating B++ reinforces confidence among policyholders, investors, and regulators regarding the insurer’s financial capability to handle insurance claims and obligations.

Long-Term Issuer Credit Rating Maintained at bbb+

In addition to affirming the Financial Strength Rating, AM Best also maintained the Long-Term Issuer Credit Rating of “bbb+” (Good) for the company.

The ICICI Lombard Long Term Issuer Credit Rating bbb+ indicates that the insurer maintains adequate credit quality and a stable financial outlook.

Credit ratings such as these are critical indicators for financial institutions, investors, and analysts because they help evaluate the creditworthiness and long-term financial sustainability of companies.

The affirmation of this rating confirms the rating agency’s confidence in the insurer’s ability to meet its long-term financial commitments.

Exceptional India National Scale Rating

Another key highlight from the rating announcement is the affirmation of the India National Scale Rating (NSR) of aaa.IN (Exceptional).

National scale ratings are designed to compare the creditworthiness of companies within a specific country, rather than globally.

An aaa.IN rating indicates exceptional financial strength within the domestic market, placing the insurer among the highest-rated companies in India’s insurance industry.

This rating further strengthens the company’s reputation as one of the most financially stable insurers in the Indian market.

Strong Balance Sheet and Risk Management

One of the primary factors behind the positive outlook revision is the company’s very strong balance sheet strength.

AM Best noted that the insurer’s financial position is supported by:

• Strong capital adequacy

• Diversified investment portfolio

• Effective enterprise risk management practices

The rating agency also acknowledged that the insurer maintains a moderate investment risk profile, although its portfolio includes exposures to equities and fixed-income securities that may not be internationally rated.

However, these risks are balanced by the company’s strong capital base and disciplined financial management.

Another factor highlighted in the report is the insurer’s exposure to contingent liabilities related to ongoing tax disputes in India.

Despite these disputes, AM Best noted that there has been no material financial impact on the company so far, indicating that the insurer’s financial resilience remains intact.

Strong Operating Performance

The rating agency also emphasized the company’s strong operating performance.

Over the past five years, the company has recorded a five-year average return on equity (ROE) of approximately 17.3% between fiscal years 2021 and 2025.

This performance reflects the insurer’s consistent profitability and efficient capital utilisation.

In fiscal year 2025, the company reported higher net income compared to the previous year, driven by:

• Improved underwriting results

• Higher investment returns

The insurer’s financial results also remained resilient during the first nine months of fiscal year 2026, demonstrating the company’s ability to maintain stable earnings even in evolving market conditions.

Although underwriting profitability remains challenging in certain segments, the company has consistently outperformed the broader Indian general insurance market.

Investment income, including capital gains from equity investments, continues to play a significant role in supporting overall profitability.

Market Position in India’s Insurance Industry

Another important factor supporting the company’s credit ratings is its strong market position in India’s general insurance industry.

According to the rating agency, the company is currently the second-largest non-life insurer in India, with an overall market share of approximately 8.7% based on gross domestic premium income in fiscal year 2025.

The insurer also holds leading positions across multiple insurance segments, including:

• Property and casualty insurance

• Marine cargo insurance

• Liability insurance

• Motor insurance

Additionally, the company ranks second in fire and engineering insurance segments, further strengthening its presence across the general insurance market.

The insurer’s underwriting portfolio is well diversified across various lines of business and distribution channels, which reduces concentration risks and supports stable revenue generation.

Most of the company’s premiums are generated within India, reflecting its strong domestic market focus.

Support from Banking Parent

AM Best also noted the neutral impact of the company’s relationship with ICICI Bank Limited, one of the largest private sector banks in India.

The bank’s association provides strategic distribution support and brand credibility, but the rating agency assessed that the company’s credit profile remains primarily driven by its own financial strength and operating performance.

This independence in financial strength assessment further highlights the insurer’s standalone stability and operational resilience.

Importance for Investors and Policyholders

The positive outlook revision carries significant implications for investors, policyholders, and the broader financial market.

For investors tracking ICICI Lombard latest corporate news, the development signals strong financial health and positive long-term growth prospects.

For policyholders, the affirmation of strong credit ratings indicates that the insurer maintains high financial capacity to honour insurance claims and commitments.

Credit rating upgrades or positive outlook revisions are often seen as indicators of improved financial stability and future performance expectations.

Regulatory Disclosure and Transparency

The company disclosed the rating development to stock exchanges including BSE Limited and National Stock Exchange of India, in compliance with Regulation 30 of the SEBI Listing Regulations.

Such disclosures ensure that market participants receive timely updates regarding developments that may influence investor sentiment or corporate valuation.

Transparency in regulatory reporting is a key component of good corporate governance practices among listed companies.

Conclusion

The decision by AM Best to revise ICICI Lombard outlook to positive while affirming key credit ratings highlights the insurer’s strong financial foundation, robust operating performance, and disciplined risk management framework.

With a very strong balance sheet, consistent profitability, and a diversified business portfolio, the company continues to strengthen its position in India’s competitive insurance sector.

The affirmation of the Financial Strength Rating B++ and Long-Term Issuer Credit Rating bbb+, along with the aaa.IN national scale rating, reinforces confidence in the company’s financial stability and long-term growth potential.

For investors and market observers, this development reinforces the insurer’s standing as one of the most financially resilient and well-managed general insurance companies in India.

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