ICICI Lombard vs Star Health (2026): Combined Ratio, Claims, Growth & Which Is Better?
ICICI Lombard vs Star Health (2026): Combined Ratio, Claims, Growth & Which Is Better?
ICICI Lombard and Star Health entered Q1 FY27 from opposite underwriting positions. ICICI Lombard's diversified motor, health and commercial franchise was hit by large fire claims and a Motor Third Party reserve adjustment, pushing its reported combined ratio above 107%. Star Health delivered faster premium growth and a fourth consecutive improvement in core underwriting profitability. Yet the headline ratios cannot be compared mechanically because Star adopted Ind AS in FY27 while ICICI Lombard's reported combined ratio remains under its existing general-insurance presentation.
General insurance analysis begins with a deceptively simple equation.
What remains is the underwriting result before investment income and other items.
That framework makes combined ratio one of the most important metrics for general insurers.
But FY27 introduces a major complication.
Star Health transitioned to Ind AS, including Ind AS 117 for insurance contracts and Ind AS 109 for financial instruments.
ICICI Lombard's headline Q1 combined ratio remains presented under the insurer's existing 1/N and n-basis framework.
Therefore the exact percentages are not perfectly like-for-like.
For Bull Run market data, see ICICI Lombard General Insurance, Star Health and Allied Insurance and the General Insurance sector dashboard.
Q1 FY27 operating comparison
| Metric | ICICI Lombard | Star Health | Interpretation |
|---|---|---|---|
| Primary premium measure | GDPI ₹8,318 cr, +7.5% | Reported 1/N GWP ₹4,287 cr, +19% | ICICI Lombard is almost twice as large on quarterly premium; Star grew much faster. |
| Broader premium / revenue context | Gross written premium about ₹8,860 cr, +10% | N-basis GWP ₹4,672 cr, +19%; Ind AS insurance revenue ₹4,917 cr, +13% | Different bases should not be silently substituted for each other. |
| Core underwriting ratio | 107.2% combined ratio on 1/N basis | 97.0% company-defined CISR under Ind AS framework | Star reported underwriting profitability; exact ratio gap is not directly comparable because accounting definitions differ. |
| Adjusted / normalised underwriting | Company-reported adjusted CoR 102.3% excluding specified one-offs | Underwriting profit ₹111 cr versus ₹16 cr YoY | Even after ICICI's one-off normalisation, Star's Q1 underwriting direction remained stronger. |
| Claims / loss measure | Incurred claims ratio 76.4% | Ind AS analytical loss ratio about 67.5% | Star's claims experience improved YoY; definitions remain framework-specific. |
| PAT | ₹403 cr, -46% | Ind AS PAT ₹550 cr, +25% | Star generated more Q1 accounting profit despite being much smaller on premium. |
| Normalised PAT | ₹575 cr excluding identified exceptional items, -23% | ₹386 cr at company's normalised 8% investment-yield framework, +44% | Normalisation methods differ and should not be treated as the same adjustment. |
| ROE / ROAE | 9.6% reported ROAE; 13.6% adjusted | 15.6% annualised normalised ROE disclosed by management | Star had the stronger normalised Q1 shareholder return metric. |
| Solvency | 2.71x | 2.09x | Both are comfortably capitalised; ICICI Lombard has more percentage headroom. |
First understand ICICI Lombard's 107.2% combined ratio
A 107.2% combined ratio means the insurer's claims and underwriting expenses exceeded the relevant premium denominator on the reported basis during the quarter.
At face value, that is weak.
But Q1 contained two specifically disclosed unusual items.
ICICI Lombard Q1 FY27 normalisation bridge
The adjusted ratio should be taken from the company's own disclosure rather than recreated through simplistic subtraction.
Insurance combined ratios involve earned-premium denominators, reserving timing, 1/N methodology and other components that do not always reconcile through a one-line arithmetic bridge.
The one-offs were real economic costs
Calling an item exceptional does not mean shareholders did not bear the cost.
The ₹63 crore fire claims were genuine insured losses.
The ₹165 crore Motor TP reserve reflected a genuine increase in expected claim obligations following a legal judgment.
For valuation, the appropriate approach is to show both:
- reported economics: 107.2% combined ratio and ₹403 crore PAT, and
- underlying operating comparison: company-adjusted 102.3% combined ratio and ₹575 crore adjusted PAT.
This lets investors separate recurring underwriting quality from unusual events without pretending the unusual events disappear economically.
Star Health's 97% CISR is not the same ratio as ICICI Lombard's 107.2%
Star Health adopted Ind AS reporting from FY27.
Its management highlights a Combined Insurance Service Ratio, or CISR, of 97.0%, improved from 98.7% in Q1 FY26.
This sits inside the Ind AS insurance-service framework.
Separately, analytical tables derived from the Ind AS statements show:
- claims/loss ratio around 67.48%, and
- expense ratio around 23.45%.
The simple sum of those two figures is approximately 90.93%.
That simple sum should not be substituted for the company-defined 97.0% CISR.
CISR captures a broader insurance-service framework and additional elements under the company's new accounting presentation.
Star's underwriting result improved from ₹16 crore to ₹111 crore
This is the cleanest operating signal in the quarter.
Star Health reported underwriting profit of ₹111 crore, compared with only ₹16 crore a year earlier.
The company described Q1 FY27 as the fourth consecutive quarter of improvement in core underwriting profitability.
The 97% CISR also moved in the right direction.
Premium growth was not being purchased simply by accepting worse claims economics.
That is important because health insurers can easily grow quickly by underpricing medical risk.
Such growth looks attractive until hospital inflation and claim frequency emerge several quarters later.
Star Health's 19% premium growth was nearly three times ICICI Lombard's GDPI growth
Star Health's reported 1/N GWP increased 19% to ₹4,287 crore.
On the N basis, GWP was approximately ₹4,672 crore, also up 19%.
Fresh retail health GWP increased 37% to ₹730 crore on the 1/N basis.
Management reported that approximately 94% of fresh retail business came from customers new to insurance.
This suggests growth is not merely customers switching from another insurer.
ICICI Lombard's GDPI increased 7.5% to ₹8,318 crore, below general-insurance industry growth of approximately 10.9%.
So Star clearly won the headline growth comparison.
But ICICI Lombard's mix explains why total growth was slower
ICICI Lombard is not a health-only insurer.
Its portfolio includes:
- motor own damage,
- motor third party,
- retail health,
- group health,
- fire,
- marine,
- engineering,
- crop and other commercial lines.
Those categories moved in very different directions in Q1.
Motor GDPI increased around 14%.
Retail health grew approximately 69.5%.
Group health grew around 16.3%.
Commercial lines declined 13.8%.
Fire premium fell around 32% because management refused to chase aggressive pricing in a highly competitive market.
Total 7.5% growth therefore hides very strong retail-health and motor performance offset by deliberate commercial-line contraction.
Slower fire growth may actually be rational underwriting
General insurance is one of the few industries where refusing revenue can create value.
If competitors price fire insurance below the level needed to compensate for expected losses, matching that price may increase premium but destroy underwriting profit.
ICICI Lombard's fire business contracted sharply amid competitive pricing pressure.
That hurt Q1 top-line growth.
It may still be the correct capital-allocation decision if the alternative was writing poorly priced risk.
The irony is that the quarter also contained two large fire claims, reinforcing exactly why commercial risk should not be priced aggressively simply to protect market share.
Retail health is becoming much more important to ICICI Lombard
ICICI Lombard's retail-health growth of approximately 69.5% was one of the strongest parts of Q1.
Its retail-health market share increased compared with the prior year.
The insurer also shifted fresh business toward higher sums insured, with the share of new retail-health policies carrying ₹10 lakh or more of cover rising materially.
This puts ICICI Lombard into more direct competition with Star Health.
Star remains the specialist.
ICICI Lombard is using a diversified customer and distribution base to increase health penetration inside a broader general-insurance franchise.
Star Health's health advantage
- Dedicated health-insurance underwriting and claims infrastructure.
- Large proprietary agency network.
- Deep hospital-network relationships.
- Health-specific product design.
- Claims analytics focused almost entirely on medical risk.
ICICI Lombard's diversification advantage
- Motor, health and commercial lines contribute to the franchise.
- Multiple customer acquisition routes.
- Claims shocks in one product can be partly offset by others.
- Stronger cross-sell across auto, banking and corporate relationships.
- Less dependence on one medical-inflation cycle.
Claims ratio: Star's Q1 trend was clearly favourable
Star Health's analytical loss ratio was approximately 67.5%, improved from around 68.5% a year earlier.
That means roughly ₹67.5 of every ₹100 on the relevant premium/revenue basis was absorbed by claims under that analytical framework.
ICICI Lombard's incurred claims ratio increased to approximately 76.4% from 73.0%.
Again, the accounting bases differ.
Still, the directions are informative.
Star's claims experience improved year on year.
ICICI Lombard's deteriorated because of fire losses, Motor TP reserving and other claims pressure.
Claims settlement ratio is not claims ratio
Star Health also reported a retail claims settlement ratio of approximately 91%.
This is a customer-service metric.
It should not be confused with the 67.5% loss ratio.
A claims settlement ratio typically measures how many claims or claim amounts are settled under the company's chosen definition.
A loss or incurred-claims ratio measures claims expense relative to premium or insurance revenue.
One tells investors about financial underwriting cost.
The other tells customers more about claims servicing and settlement performance.
Star settled approximately 9.6 lakh claims in Q1, with more than 80% settled cashless.
The health-specialist model has one unavoidable risk: medical inflation
Star Health derives almost its entire economic franchise from health insurance.
That specialisation produces expertise.
It also creates concentration.
If hospital prices, procedure intensity, medical technology costs or claim frequency rise faster than premium repricing, almost the entire portfolio is affected.
Unlike ICICI Lombard, Star cannot rely on motor or commercial insurance to offset a poor health claims cycle.
This makes claims inflation the central structural risk in Star's model.
Star is trying to fight claims inflation operationally, not only through price increases
If these operational controls keep the loss ratio stable while premium grows in the high teens, Star can create powerful underwriting operating leverage.
ICICI Lombard has a different claims challenge: long-tail Motor TP
Motor Third Party insurance is fundamentally different from short-duration retail-health claims.
A Motor TP liability can remain unresolved for years because final settlement may depend on courts, injury severity, compensation assumptions and legal precedent.
That creates reserve risk.
The Q1 Supreme Court judgment is a textbook example.
ICICI Lombard increased Motor TP reserves by ₹165 crore because expected claim obligations changed after the legal interpretation.
Nothing about the original policy premium changed.
The liability estimate changed.
This is why long-tail casualty reserving deserves a different analytical treatment from current-period hospital claims.
Investment income can hide weak underwriting — but only temporarily
General insurers invest premium before claims are paid.
That float generates investment income.
A combined ratio slightly above 100% can therefore still produce accounting profit if investment returns are strong.
But consistently relying on investments to repair structurally weak underwriting is risky.
ICICI Lombard generated approximately ₹1,174 crore of investment income in Q1.
Net capital gains were around ₹183 crore, lower than the prior-year period.
Even with investment income, PAT fell to ₹403 crore because the underwriting shock was large.
Star Health generated approximately ₹644 crore of investment income and reported ₹550 crore of Ind AS PAT.
The company's normalised PAT framework assumes an 8% annual investment yield and produced approximately ₹386 crore of normalised PAT.
That lower normalised figure is useful because market-linked investment gains can move materially quarter to quarter.
Normalised profit: the adjustments solve different problems
ICICI Lombard adjusted PAT
The company's ₹575 crore adjusted PAT excludes specific identified claims/reserve effects: the large fire losses and Motor TP judgment impact.
This answers: “What would profit have looked like without these unusual insurance events?”
Star Health normalised PAT
The company's ₹386 crore normalised PAT applies a standardised 8% annual investment-yield assumption to reduce short-term mark-to-market volatility.
This answers: “What would profit look like under a normalised investment return?”
The two adjusted profits therefore cannot be compared as though they used the same methodology.
One adjusts underwriting events.
The other normalises investment income.
Solvency: ICICI Lombard has the larger buffer
ICICI Lombard reported a solvency ratio of 2.71x.
Star Health reported approximately 2.09x.
Both are comfortably above the 1.50x regulatory minimum.
ICICI Lombard therefore carries greater percentage capital headroom.
That matters because diversified insurers need capital against motor, health, commercial and catastrophe exposures simultaneously.
Star's 2.09x ratio is also healthy enough that current growth is not obviously capital constrained.
Valuation requires caution after Star's Ind AS transition
Bull Run does not currently present a clean comparable P/E and P/B pair for both insurers.
A simple equity-based approximation is possible.
ICICI Lombard disclosed June book value per share of approximately ₹340.46.
Against Bull Run's ₹1,616 August 25 price, that is roughly 4.75x book value.
Star Health reported June total equity of approximately ₹10,144 crore.
Against Bull Run market capitalisation of approximately ₹35,029 crore, that is roughly 3.45x reported equity.
But this is not a perfect valuation comparison.
Star's opening equity changed materially under the Ind AS transition.
ICICI Lombard remains under a different reporting framework for the metrics cited here.
Therefore the apparent 3.45x versus 4.75x gap should be treated as an indicative market-to-equity comparison, not a definitive P/B ranking.
Market performance tells a very different story
| August 25, 2026 Bull Run snapshot | ICICI Lombard | Star Health |
|---|---|---|
| Price | ₹1,616.00 | ₹582.85 |
| Market capitalisation | ₹90,600.76 cr | ₹35,029.24 cr |
| 1-month return | -2.76% | -0.99% |
| 3-month return | -12.68% | +11.09% |
| 6-month return | -16.98% | +22.95% |
| 1-year return | -15.79% | +31.42% |
| 52-week high / low | ₹2,064.90 / ₹1,544.60 | ₹623.90 / ₹416.55 |
| RSI (14) | 43.09 | 49.17 |
| Bull Run Score | 51.7 | 61.1 |
Star Health had materially outperformed ICICI Lombard over the preceding year.
The market appears to have rewarded Star's improving underwriting trajectory while penalising ICICI Lombard's Q1 claims shock and slower premium growth.
Past price performance, however, does not guarantee that the relative underwriting trend will continue.
Which model is more diversified?
ICICI Lombard by a wide margin.
Motor, health and commercial insurance all contribute materially.
This reduces dependence on a single claims cycle.
Star Health is essentially a health-insurance specialist, with personal accident and travel representing very small parts of the economics.
That concentration is not automatically bad.
A specialist can develop superior risk selection, claims analytics, hospital relationships and product design.
The cost is exposure to one industry's inflation and regulatory regime.
Which business has better current underwriting quality?
On the reported Q1 direction, Star Health.
Its underwriting profit increased sharply and CISR improved.
ICICI Lombard's reported combined ratio deteriorated and the company produced a substantial underwriting loss.
Even after excluding specified one-offs, ICICI's adjusted combined ratio remained slightly above 100% at 102.3%.
Because the accounting frameworks differ, the strength of this conclusion comes from profit direction rather than the precise spread between ratio percentages.
Which business has better claims diversification?
ICICI Lombard.
A health claims spike does not affect its entire premium pool.
A motor downturn does not affect commercial fire in the same way.
A corporate pricing cycle does not necessarily move retail health simultaneously.
Star Health has no equivalent diversification.
If medical claims inflation rises sharply, almost the whole company feels it.
Which business has the stronger growth runway?
Both have strong but different runways.
Star benefits from India's low health-insurance penetration, rising medical awareness and increasing willingness to buy higher sums insured.
ICICI Lombard can grow health while also monetising auto sales, commercial insurance penetration and cross-sell through broader financial relationships.
Q1 growth clearly favoured Star.
Long-term optionality is broader at ICICI Lombard.
ICICI Lombard vs Star Health: category-by-category
| Question | Current edge | Reason |
|---|---|---|
| Larger premium franchise? | ICICI Lombard | ₹8,318 crore GDPI versus Star's ₹4,287 crore reported 1/N GWP. |
| Faster Q1 premium growth? | Star Health | 19% versus ICICI Lombard at 7.5% GDPI growth. |
| Better reported Q1 underwriting direction? | Star Health | ₹111 crore underwriting profit and improving CISR versus ICICI Lombard's underwriting loss. |
| Lower claims/loss ratio? | Star Health directionally | Approximately 67.5% analytical loss ratio versus ICICI's 76.4% incurred-claims ratio, with material accounting-definition caveat. |
| Greater product diversification? | ICICI Lombard | Motor, health, fire, marine, engineering and other lines versus Star's health concentration. |
| Stronger retail-health specialisation? | Star Health | Its entire operating model is built around medical underwriting, hospital networks and health claims. |
| Stronger Q1 retail-health growth? | ICICI Lombard percentage growth | ICICI Lombard reported approximately 69.5% retail-health growth, while Star's fresh retail health GWP grew 37% on 1/N basis. |
| Higher solvency? | ICICI Lombard | 2.71x versus Star Health around 2.09x. |
| Stronger one-year stock performance? | Star Health | +31.42% versus ICICI Lombard at -15.79% on Bull Run's August snapshot. |
| Lower simple market-to-equity multiple? | Star Health, indicatively | Approximately 3.45x reported equity versus ICICI Lombard around 4.75x book, but frameworks differ after Star's Ind AS transition. |
Which is stronger in 2026?
Star Health delivered the better Q1 operating quarter.
Premium grew faster, underwriting profit expanded sharply, the health claims ratio improved and normalised ROE moved higher.
ICICI Lombard remains the stronger diversified insurance platform.
It is larger, better capitalised and exposed to several different insurance pools rather than one medical-risk ecosystem.
The key distinction is therefore:
Star Health = specialist underwriting upside with concentrated health risk.
ICICI Lombard = diversified franchise quality with a weak Q1 distorted by real but unusual claims events.
The next few quarters matter more than this single comparison.
If Star sustains sub-100 company-defined CISR and high-teens premium growth through monsoon and medical-inflation pressure, the underwriting improvement becomes much more credible.
If ICICI Lombard returns toward a 100–102% underlying combined ratio while retail health and motor keep growing, Q1 will look more like a temporary claims shock than structural deterioration.
What to monitor over the next four quarters
- ICICI Lombard adjusted combined ratio: should improve without relying repeatedly on exceptional-item exclusions.
- Motor TP reserving: watch whether the Supreme Court-related reserve is sufficient.
- Commercial pricing: fire growth should recover only when pricing becomes economically attractive.
- ICICI retail health: 69.5% Q1 growth could become a meaningful mix shift if sustained.
- Star CISR: staying below 100% through higher-claims quarters would validate underwriting discipline.
- Star loss ratio: medical inflation should not erase the current improvement.
- Star fresh retail growth: 37% growth needs to retain strong renewal quality.
- Star normalised ROE: better long-run profitability measure than one quarter's investment-driven PAT.
Frequently asked questions
Which is larger, ICICI Lombard or Star Health?
ICICI Lombard is larger by quarterly premium. Q1 FY27 GDPI was ₹8,318 crore versus Star Health reported 1/N GWP of ₹4,287 crore.
Which grew faster in Q1 FY27?
Star Health grew faster, with reported 1/N GWP increasing 19% year on year. ICICI Lombard's GDPI increased 7.5%.
What was ICICI Lombard's Q1 combined ratio?
ICICI Lombard reported a 107.2% combined ratio on the 1/N basis. The company said the ratio was 102.3% after excluding identified large fire losses and the Motor TP reserve impact.
What was Star Health's combined ratio?
Star Health highlights a company-defined Combined Insurance Service Ratio of 97.0% under its Ind AS framework. Analytical claims and expense ratios should not be mechanically added and compared with ICICI Lombard's old-framework combined ratio as though the definitions were identical.
Why did ICICI Lombard profit fall?
Q1 FY27 PAT fell 46% to ₹403 crore after two large fire losses, a ₹165 crore Motor TP reserve increase following a Supreme Court judgment, weaker commercial insurance economics and lower capital gains. The company reported adjusted PAT of ₹575 crore after excluding the specified exceptional claims effects.
Which has higher solvency?
ICICI Lombard reported a solvency ratio of 2.71x at June 2026, higher than Star Health at approximately 2.09x. Both exceed the 1.50x regulatory requirement.
Which is more diversified?
ICICI Lombard is substantially more diversified across motor, health and commercial insurance. Star Health is a specialist health insurer, giving it deeper medical-risk focus but greater concentration in healthcare claims and medical inflation.