Recognising the increasing vulnerability to natural catastrophes — especially across industrial corridors, logistics hubs and renewable energy zones, ICICI Lombard has decided to invest in advanced underwriting practices, parametric insurance products and deeper climate risk analytics.
With a view to beefing up its assessment capabilities, the non-life insurer has chosen to forge partnerships with global catastrophe (CAT) modelling firms. These collaborations enable ICICI Lombard to conduct rigorous location-specific risk evaluations for hazards such as floods, cyclones, storms and landslides. “Our aim is to proactively identify high-risk zones and offer protective coverage while mitigating the scale of potential losses,” the company said in its latest annual report.
In alignment with its broader sustainability goals, ICICI Lombard has also introduced a Responsible Investing Framework. This guide supplements the company’s investment policy, ensuring that environmental and climate considerations are factored into all financial decisions.
Robust plan
From a risk transfer perspective, the company claims to maintain a robust reinsurance programme, combining proportional and non-proportional treaties across both traditional and specialised lines. Its strategy focuses on protecting value at risk through well-calibrated retention policies and partnerships with top-rated global reinsurers, effectively managing credit exposure and large-loss events.
The impact of climate change is now a core component of the general insurer’s annual budgeting exercise. The insurer performs a detailed analysis of past and projected catastrophe trends to gauge the financial impact of climate-driven events. This forward-looking approach ensures that its natural catastrophe protection is sufficiently capitalised.
On the innovation front, ICICI Lombard has also developed an in-house Automated Weather Alert System (AWAS) in collaboration with Bhugol GIS Ltd., a start-up incubated by IIT Bombay professors. AWAS monitors and analyzes potential climate threats, issuing proactive advisories to clients to reduce exposure and mitigate loss.
The insurer stated that climate-related advisories are issued only when a high probability of risk is identified, reinforcing its commitment to data-driven risk management in a changing climate.
ICICI Lombard is also capitalising on new opportunities in crop insurance, leveraging government-backed initiatives such as the Pradhan Mantri Fasal Bima Yojana (PMFBY) and integrating services with digital public infrastructure including Aadhaar and UPI. These efforts are designed to increase insurance penetration among rural and economically weaker populations in the country.
