Go Digit Q2 FY27 Earnings Call: Gujarat Floods Cost Rs. 63 Cr, Private Car OD Loss Ratio Turns (GODIGIT)

Go Digit General Insurance Ltd held its Q2 FY27 earnings call on November 05, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

A "Decent Quarter" Dented by Gujarat Floods

• Insurance revenue of Rs.2,720 Cr — Q2 FY 2026-2027 vs Rs.2,675 Cr in Q2 FY 2025-2026; PAT ex-mark-to-market of Rs.208 Cr vs Rs.277 Cr YoY, with ex-flood PAT at Rs.255 Cr vs Rs.285 Cr; sequentially above Q1 FY 2026-2027 ex-MTM PAT of Rs.239 Cr.
• Net flood losses of Rs.63 Cr — from the Gujarat floods (twice) plus a smaller Northeast event in Q2 FY 2026-2027, vs Rs.10 Cr in Q2 FY 2025-2026, a Rs.53 Cr YoY drag; Chairman Kamesh Goyal still characterized Q2 FY 2026-2027 as a "decent quarter".
• Combined ratio of 99.8% — vs 94.9% in Q2 FY 2025-2026; ex-flood 97.4% vs 94.5% (~2.9% higher YoY); gross combined ratio 95.9% vs 79.7%.
• Adjusted PBT of ~Rs.360 Cr — on management's bridge basis (adding back MTM losses of Rs.88 Cr, profit commission of Rs.4 Cr, and a Rs.23 Cr private car OD impact) vs Rs.348 Cr in Q2 FY 2025-2026.
• Solvency strong at 2.4% — still computed under IGAP; Q2 FY 2026-2027 ROE of 4.4% on IGAP net worth; ~Rs.3,300 Cr of additional net worth cannot be distributed or used to write business.
• Ind AS reporting transition — Go Digit reports only under Indian accounting standards from April 1, 2025 with restated comparatives; management cautioned Ind AS gross/discounted ratios are not comparable with earlier IGAP net ratios (motor TP loss ratio 4.2% under Ind AS vs 74.1% under IGAP, the difference being Rs.171 Cr of discounting/reserves recycled through insurance finance expense in Q2 FY 2026-2027).

Premium Degrowth Narrowing, But GDPI Still Trails Industry

• GDPI of -1.2% — vs industry +7% in Q2 FY 2026-2027; GWP -3.6%, roughly flat excluding health reinsurance, inward and government health business not renewed on unattractive pricing (Rs.95 Cr premium not booked in FY 2026-2027).
• Degrowth "reducing substantially" — quarter-by-quarter over Q1-Q2 FY 2026-2027; management will track Q3 FY 2026-2027 month-by-month through the October-November festival season.
• Motor GWP -4.1% — private car -10.7% (standalone OD premium -40% after April-May 2026 price corrections), two-wheeler +18.6%, CV -20% with school bus/auto-rickshaw degenerating for the last three quarters on uneconomic commissions; motor share 5.68% in Q2 FY 2026-2027 vs 5.58% in Q1, own-damage share 4.99% vs 4.76%; August 2026 was the best motor month of FY 2026-2027.
• Fire GWP -29.8% — in Q2 FY 2026-2027; personal accident premium reclassified to group health in the quarter.
• Motor TP share lost in FY 2026-2027 — management attributed this to competitors paying higher commission; as a partnership-driven company Digit will keep adding new channels and partnerships for motor.
• Retention up at 84.3% — vs 79.1% in Q2 FY 2025-2026; AUM (book value) at Rs.24,371 Cr, up 15.9%; long-term advance premium of Rs.3,556 Cr as of September 30, 2026 vs Rs.3,209 Cr in March 2026; two-wheeler new business grew 15% on collected basis in Q2 FY 2026-2027.

Private Car OD Inflection; Commercial Lines Resilient Despite Floods

• Private car OD attritional loss ratio improved to 81.1% — in Q2 FY 2026-2027 from 85.3% in Q1, better than the stabilization management projected in July for Q2; frequency fell in August-September 2026 with stable severity; reported Q2 loss ratio of 93% reflects floods; management said the tide on private car OD loss ratios "has turned", aided by actions from February 2026 and significantly April-May 2026.
• OD retention of ~95-96% — with 4% obligatory cession, so gross vs net earned premium makes little difference in measuring the OD book; management framed further improvement as an expectation, not formal forward guidance.
• Commercial line gross earned loss ratios (Q2 FY 2026-2027) — fire 59%, engineering 62.4%, liability 25.7%; H1 FY 2026-2027: fire 61.5%, engineering 56.1%, liability 45%; treaties across the three lines continue to show favorable results despite floods; Q2 fire loss ratio was slightly better than Q1, which management called a good sign.
• Health, travel and PA loss ratios improved — on an Ind AS net-basis in Q2 and 1H FY 2026-2027; management said group health loss ratios will remain broadly similar to current levels, with no step-change guided; retail health is under 6-7% of the book in FY 2026-2027, with the rest group health.
• EV flood exposure flagged — flood losses are structurally higher for electric vehicles because manufacturer batteries often cannot be repaired (the battery is 50% of vehicle value and EV salvage values are much lower), whereas petrol/diesel total-loss flood claims retain 50-60% of market value as salvage depending on make/model.

Distribution Paper, Fixed Commissions and the IFRS 17 Transition

• Regulator's distribution discussion paper — contemplates commission ratios moving lower, especially for the TP book; Kamesh Goyal noted that over the past 10 quarters since listing (through Q2 FY 2026-2027) current EOM/AUM guidelines actually increased commissions, as some large insurers writing crop and government health used the headroom to raise retail-side commissions; the paper proposes retaining an AUM cap with commission within it and suggests, as an example, that crop business receive one-third of the weightage.
• No impact modeling done — management declined to speculate on final guidelines and has not run financial modeling of the discussion paper; Goyal directed analysts to website disclosures splitting commission and operating expenses to model it themselves.
• Fixed-commission regime — the commission cap and tariffed motor TP do not change Digit's underwriting approach; where commissions went up (CVs, school buses, auto rickshaws) Digit judged the business uneconomical and does not write it, and would start writing it if commissions come down; management sees "no reason" to be worse off since "what is free is free for everyone."
• IFRS 17 endorsement — Goyal cited discussions with CFOs of the top three global insurance groups, none of whom viewed IFRS 17 as inferior to earlier accounting systems; underlying economics are identical under Indian GAAP and IFRS 17, only the timing of profit recognition changes.
• Detailed IFRS 17 coverage at the February 2027 analyst meet — ahead of the industry's transition from 1st of April 27 (start of FY 2027-2028); triangles will be published quarterly under the Indian accounting system, enabling quarterly tracking of TP claims development.
• Discounting mechanics — Appointed Actuary Adarsh Agarwal outlined the methodology: risk-free government bond yield curve at each quarter-end plus an illiquidity premium equal to 25% of the gap between AAA corporate bond and risk-free yields; September 2026 (Q2 FY 2026-2027) discount rates were 6.2%-6.6% for liabilities up to 1 year, rising to ~7.5% beyond 8 years; discounting impact on motor TP is ~20% of outstanding liabilities plus IBNR; management declined to publish ex-discounting numbers unilaterally, offering to align with peer disclosure after Q1 FY 2027-2028 results in July.

Equity at 9.6% of AUM; Expense Ratio Up on Two-Wheeler Mix

• Equity, REITs and InvITs at 9.6% of AUM — book value basis as of Q2 FY 2026-2027 (market value slightly higher; excludes 81 bonds), up from ~3.4-3.5% over the prior 2.5 years, with small unrealized gains and no unrealized losses; ~Rs.96 Cr unrealized equity gains at Q2 FY 2026-2027, which management said would have roughly doubled based on market levels at the call date.
• Evaluating a move to 12.5% of AUM in equity — including REITs (period unspecified), to be executed per the capital allocation model quarter-by-quarter; fixed income remains ~90% of the portfolio; management committed to keep adding equity when markets fall and retains the ability to take duration back to 5.2 based on its rate view (period unspecified).
• Reinvestment yields of 7.8% — in Q1 FY 2026-2027, 7.7% in Q2 FY 2026-2027 and ~8% in October 2026; overall yield ~7.4%; duration 4.9 in October 2026 (vs 5.2 in March 2025, 4.5 in March 2026).
• Expense ratio increase is mix-driven — Kamesh Goyal attributed the Q2 FY 2026-2027 rise to the growing proportion of two-wheeler business, which carries higher commissions than other lines; management stated that on an operational expense basis the company is the industry's best among the top 10 companies despite writing more retail business.
• All acquisition costs are commission — CFO Ravi Khetan clarified there is no separate concept of non-commission third-party acquisition expense; on business-linked employee incentives, the exact number is not readily available but management would not expect such expenses to exceed 1.5% of premium (period unspecified).

Profitability Over Growth; IDBI Bancassurance Optionality

• Profitability over growth in FY 2026-2027 — management is not betting on a TP price hike, on how courts read the judgment, or on capital markets; the market remains soft except property, where pricing has firmed since mid-September 2026, and commissions remain high.
• Q3-Q4 FY 2026-2027 hoped to be better — management hopes the next couple of quarters will improve, aided by pricing discipline returning in the fire segment; framed as an expectation, not formal guidance.
• New commercial-lines product launched — the product earlier flagged as potentially sizable over 2-3 years is live, with a full pricing and rating model built and portal integration underway; quotes are currently below 20 (as of Q2 FY 2026-2027), management foresees 100-200 quotes as the level at which it would be positioned when the market turns (period unspecified), and will wait another 6 months before judging how substantial the business is.
• IDBI Bank transaction is between Fairfax and the Government of India — management is not privy to its status or likely completion timeline; Fairfax's press release stated that Fairfax intends to sell its shareholding in Digit GI to IDBI Bank, and management has no information beyond that public announcement.
• Bancassurance optionality — Digit works with many large private banks, recently began working with large public sector banks, and works with NBFCs, but does not have one large bank as part of the group; bancassurance is typically more profitable than other channels across life, GI and health; if IDBI Bank becomes a corporate agent of Digit, management would be happy to develop a bancassurance relationship with a large bank.
• Group health pricing lever — a 5% increase in group health pricing would give the company an opportunity to grow the business significantly more (period unspecified); management also cited industry-wide group employer-employee health loss ratios currently exceeding 100% versus 65-75% for retail health (FY 2026-2027), and said AUM guidelines effectively make retail customers subsidize corporate customers — a dynamic he said has to change.