Rating: Buy; ICICI Lombard to invest in digital – The Financial Express

The Financial Express
ICICI Lombard General Insurance (ICICIGI) held a ‘Digital Day’ event to outline its key initiatives in the digital space that will be a vital part of its strategy for improving growth and profitability going ahead. Digitization has been implemented across segments within the company and encompasses the entire journey for various stakeholders, including customers, distribution partners and garages. It is also the first large insurer to move all core applications to a cloud platform.
The company’s ILTakeCare app has been its key initiative in the health segment, which on-boards customers and provides support services. About 35% of app users are non-ICICIGI customers. ICICIGI has curated seamless digital offerings for SME clients, which ease the claim settlement process. In the motor segment, it has introduced ‘pay as you drive’ and ‘pay how you drive’ – first of its kind.
For ICICIGI, 97% of policies are issued digitally, 95% of policies are automatically underwritten, 47% of health reimbursements are done through the ‘RIA’ bot, 66% of group cash claims are approved through AI, and 75% of motor OD claims are processed through ‘Instaspect”’. ICICIGI will continue to invest in digital and tech initiatives to the tune of 1-1.5% of GWP (gross written premium). In the medium term, efficiencies from these investments, along with scale benefits, will improve profitability. We have a Buy rating with a oneyear TP of Rs 1,500.
Also read: Investing in 2023: As good as gold
For ICICIGI, digitization is not just a sales strategy but it is the cornerstone for services. It has launched an instant automated claim settlement system and it is the first in the industry to settle claims of up to Rs 0.5m using automation. ICICIGI is closely working with digital partners like Ola, Paytm and Goibibo. In FY23, ICICIGI has partnered with 120 startups, operated pilots with 25 of them and started services with 7 startups. It had set up a fraud management framework in 2007, earlier than the IRDAI’s mandate in 2012-13.
In the medium term, efficiencies from these investments and scale benefits will improve profitability.
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