The Company registered 11% decline in net premium income in Q1FY2021. The commission expenses declined 25% and operating dipped 22% in Q1FY2021.

Value of New Business (VNB) for Q1FY2021 was Rs 201 crore. With an APE of Rs 823 crore for the Q1FY2021, VNB margin was 24.4% for Q1FY2021 as compared to 21.7% for FY2020. The increase in VNB margin is primarily on account of increase in protection mix.

APE was Rs 823 crore for Q1FY2021 as compared to Rs 1470 crore for Q1FY2020. New business premium was Rs 1499 crore for Q1FY2021 as compared to Rs 2226 crore for Q1FY2020.

The Company offers a range of products across protection and savings solutions to meet the specific needs of customers. During Q1FY2021, the protection APE was Rs 214 crore resulting in an improvement in share of APE from 14.6% for Q1FY2020 to 26.0% in Q1FY2021.

The Company has strong focus on improving the quality of business and customer retention which is reflected in 13th month persistency ratios. 13th month and 49th month persistency at 2MFY2021 stand at 81.8% and 63.9% respectively.

The cost to total weighted received premium (TWRP) ratio stood at 14.8% in Q1FY2021 compared to 17.0% in Q1FY2020. The cost to TWRP for the savings business stood at 8.8% in Q1FY2021 compared to 11.3% in Q1FY2020.

The total assets under management of the Company was Rs 170006 crore end June 2020 which makes it one of the largest fund managers in India. The Company had a debt-equity mix of 57%:43% end June 2020. 94.3% of the debt investments are in AAA rated and government bonds.

Company's net worth was Rs 7795 crore end June 2020. The solvency ratio was 205.1% against regulatory requirement of 150%.

Net premium earned (gross premium less reinsurance premium) decreased by 11% from Rs 6208 crore in Q1FY2020 to Rs 5551 crore in Q1FY2021. Retail renewal premium increased by 3% from Rs 3976 crore in Q1FY2020 to Rs 4107 crore in Q1FY2021. Retail new business premium decreased by 41% from Rs 1533 crore in Q1FY2020 to Rs 912 crore in Q1FY2021 primarily on account of decrease in linked business. Group premium decreased by 11.2% from Rs 820 crore in Q1FY2020 to Rs 728 crore in Q1FY2021.

Total investment income of Rs 13146 crore in Q1FY2021 comprised of Rs 12163 crore (Q1FY2020: Rs 1327 crore) under the unit-linked portfolio and an investment income of Rs 983 crore (Q1FY2020: Rs 767 crore) under the non-unit funds. The investment income under unit-linked portfolio is directly offset by a change in valuation of policyholder liabilities. Unit linked portfolio investment income increased from Rs 1327 crore in Q1FY2020 to Rs 12163 crore in Q1FY2021 primarily on account of increase in market value of the securities held.

Other income increased from Rs 17 crore in Q1FY2020 to Rs 23 crore Q1FY2021.

Total expenses (including commission) decreased by 20% from Rs 1073 crore in Q1FY2020 to Rs 862 crore in Q1FY2021. Commission expense (including rewards) decreased by 25% from Rs 277 crore in Q1FY2020 to Rs 207 crore in Q1FY2021. New business commission (including single premium) has decreased from Rs 191 crore in Q1FY2020 to Rs 129 crore in Q1FY2021.

Renewal commission has decreased from Rs 74 crore in Q1FY2020 to Rs 72 crore in Q1FY2021. Operating expenses decreased by 18% from Rs 796 crore Q1FY2020 to Rs 655 crore in Q1FY2021 primarily on account of decrease in expenses relating to employee remuneration and welfare benefits, advertisement cost and travel and business conferences expenses.

Claims and benefit payouts decreased by 28.8% from Rs 3645 crore in Q1FY2020 to Rs 2596 crore in Q1FY2021 primarily on account of decrease in surrender claims from Rs 2849 crore in Q1FY2020 to Rs 1796 crore in Q1FY2021.

Change in actuarial liability, including funds for future appropriation, increased from Rs 3285 crore in Q1FY2020 to Rs 14928 crore in Q1FY2021. Fund reserve, which represents liability carried on account of units held by unit linked policyholders, increased from Rs 1613 crore in Q1FY2020 to Rs 13166 crore in Q1FY2021. The increase in fund reserves is primarily due to higher investment income in the unit linked portfolio. Non-unit reserve increased from Rs 1618 crore in Q1FY2020 to Rs 1777 crore in Q1FY2021.

ICICI Prudential Life Insurance has posted a 13.1% growth in Annuity new business premium and a 14.2% growth in traditional long-term savings business during Q1FY2021, over Q1FY2020 despite the challenges arising due to Covid-19.

With a new business sum assured of Rs 93757 crore for the quarter, the Company has achieved a market leadership position. A robust risk management mechanism and investment policy, has ensured zero Non Performing Assets (NPAs) since inception and across market cycles. The Company's solvency ratio for the quarter stood at 205%, well above the regulatory requirement of 150%.

The embedded value per share stood at Rs 163.8 per share end June 2020.

Financial Performance FY2020

Profit after tax decreased from Rs 1141 crore in FY2019 to Rs 1069 crore in FY2020. Net premium earned (gross premium less reinsurance premium) increased by 7.5% to Rs 32879 crore in FY2020 from Rs 30578 crore in FY2019. Retail renewal premium increased by 2.2% to Rs 20664 crore in FY2020 from Rs 20225 crore in FY2019. Retail new business premium decreased by 3.2% to Rs 7876 crore in FY2020 from Rs 8140 crore in FY2019. Group premium increased by 90.7% from Rs 2565 crore in FY2019 to Rs 4890 crore in FY2020 primarily on account of an increase in group gratuity & credit life business.

Total investment income loss of Rs 12117 in FY2020 comprised loss of Rs 16072 crore (Investment income/gain FY2019: Rs 7252 crore) under the unit-linked portfolio and an investment income of Rs 3955 crore (FY2019: Rs 3604 crore) under the non-unit funds. The investment income under unit-linked portfolio is directly offset by a change in valuation of policyholder liabilities. Unit linked portfolio investment income decreased from Rs 7252 crore in FY2019 to a loss of Rs 16072 crore in FY2020 primarily on account of decrease in market value of the securities held.

Other income decreased from Rs 89 crore in FY2019 to Rs 81 crore FY2020.

Total expenses (including commission) increased by 6.1% from Rs 4829 crore in FY2019 to Rs 5125 crore in FY2020. Commission expense (including rewards) decreased by 1.1% from Rs 1604 crore in FY2019 to Rs 1586 crore in FY2020. New business commission (including single premium) has decreased from Rs 1167 crore in FY2019 to Rs 1140 crore in FY2020. Renewal commission has decreased from Rs 384 crore in FY2019 to Rs 382 crore in FY2020. Operating expenses increased by 9.7% from Rs 3225 crore FY2019 to Rs 3539 crore in FY2020 primarily on account of increased advertisement cost.

Claims and benefit payouts increased by 35.9% from Rs 14259 crore in FY2019 to Rs 19377 crore in FY2020 primarily on account of increase in surrender claims by Rs 4368 crore from Rs 10612 crore in FY2019 to Rs 14979 crore in FY2020.

Change in actuarial liability, including funds for future appropriation, decreased from Rs 21159 crore in FY2019 to Rs (4859) crore in FY2020. Fund reserve, which represents liability carried on account of units held by unit linked policyholders, decreased from Rs 13444 crore in FY2019 to Rs (13860) crore in FY2020. The decrease in fund reserves is primarily due to higher claims and lower investment income in the unit linked portfolio. Non-unit reserve increased from Rs 7559 crore in FY2019 to Rs 8803 crore in FY2020.