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Results
16-Apr-22
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Analysis
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ICICI Prudential Life Insurance Company
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Healthy growth in VNB and improvement in VNB margin
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ICICI Prudential Life Insurance Company has posted strong 190% growth
in the net profit to Rs 184.67 crore in the quarter ended March 2022 (Q4FY2022)
compared with net profit of Rs 63.78 crore in Q4FY2021.
The
Company registered 4% decline in net premium income in Q4FY2022. The commission
expenses were flat and operating expense jumped 52%. Benefits paid declined 4%
in Q4FY2022.
Value
of New Business (VNB) improved 31% to Rs 775 crore for Q4FY2022 over Q4FY2021.
APE increased 4% to Rs 2608 crore for Q4FY2022. New business premium declined 7%
to Rs 4788 crore for Q4FY2022 from Rs 5133 crore for Q4FY2021.
Value
of New Business (VNB) increased 33% to Rs 2163 crore for FY2022 over FY2021. With
an APE of Rs 7733 crore for FY2022, VNB margin was 28.0% for FY2022 as compared
to 25.1% for FY2021.
New business sum assured increased 25%
to Rs 773146 crore for FY2022, as compared to Rs 616684 crore for FY2021. Based
on new business sum assured, the Company continued to maintain a leadership
within the private life insurance sector.
The Company has strong focus on
improving the quality of business and customer retention which is reflected in
13th and 49th month persistency ratios. 13th month persistency ratio was stable
at 85.7% end March 2022 as compared to 84.8% end March 2021. 49th month persistency
ratio improved to 63.7% for 11MFY2022 as compared to 63.0% for 11MFY2021.
APE was Rs 7733 crore for FY2022, a
growth of 19.7% as compared to Rs 6462 crore for FY2021. APE was Rs 2608 crore
for Q4FY2022, a growth of 3.9% as compared to Rs 2508 crore for Q4FY2021. New
business premium was Rs 15036 crore for FY2022, a growth of 15.4% as compared
to Rs 13032 crore for FY2021.
The Company offers a range of products
across protection and savings solutions to meet the specific needs of
customers. During FY2022, retail traditional savings APE grew by 20.5% from Rs 2008
crore in FY2021 to Rs 2420 crore in FY2022. Protection APE grew by 25.5% year
on year to Rs 1313 crore and the protection mix stood at 17.0% in FY2022.
As a result, new business sum assured
was Rs 259983 crore for Q4FY2022, a growth of 26.7% as compared to Rs 205184
crore for Q4FY2021. The new business sum assured was Rs 773146 crore for
FY2022, a growth of 25.4% as compared to Rs 616684 crore for FY2021. Based on new
business sum assured, the Company continued to maintain a leadership within the
private life insurance sector.
The cost to total weighted received
premium (TWRP) ratio for the savings business stood higher at 12.8% in FY2022
as compared to 9.6% in FY2021. Overall cost to TWRP stood at 18.6% in FY2022.
The growth in expenses ahead of APE growth was due to higher discretionary expenses
in light of the easing of the pandemic as well as investment in capacity for
future growth.
The total assets under management of
the Company was Rs 240492 crore end March 2022, a growth of 12.3% over Rs 214218
crore end March 2021. The Company had a debt-equity mix of 53:47 at March 31,
2022. 97.8% of the debt investments were in AAA rated securities and government
bonds.
The Company’s net worth was Rs 9163
crore end March 2022. The solvency ratio was 204.5% end March 2022 against the
regulatory requirement of 150%.
Embedded Value was Rs 31625 crore end
March 2022 compared to Rs 29106 crore end March 2021. Embedded value per share
stood at Rs 220.0 end March 2022.
N S Kannan, MD & CEO, ICICI
Prudential Life Insurance said, “Despite the disruptions caused by the third
wave of COVID-19, which impacted productivity in January and February, we were
able to demonstrate resilience in operations. In March, we posted the best ever
monthly sales by the Company in any year since inception. This helped grow VNB
by 33% year-on-year to Rs 2163 crore for FY2022 with a robust VNB margin of
28.0%.
Through the pandemic-affected period,
we focused on putting in place the building blocks for growth. We innovated
across product categories with two new funds, Balanced Advantage Fund &
Sustainable Equity Fund for unit linked customers, two new products for customers
seeking a regular income, and the return on premium variant of retail
protection product. The contribution of these innovative offerings was more
than 25% of the APE in FY2022.
The strong performance was driven in
equal measure by over 100 valuable partnerships forged this year. In the agency
channel, we added almost 25,000 agents through the year. This enabled us to
support strategy of deepening and widening distribution. Our revamped customer
app has crossed the milestone of 1 million downloads and is one of the best
rated in the industry. Today one out of every four service transactions is
carried out on our mobile app. Further, I am happy to report that this year is
the first year of profitability for our wholly owned subsidiary, ICICI Prudential
Pension Fund Management Company Limited.
We are now poised to take advantage of
all this good work that has gone into building a growing and sustainable
institution with customer centricity at its core.”
Financial Performance FY2022
Profit after tax decreased from Rs 960
crore in FY2021 to Rs 754 crore in FY2022. Net premium earned (gross premium
less reinsurance premium) increased by 3.85% from Rs 34973 crore in FY2021 to Rs
36321 crore in FY2022.
Total investment income of Rs 25830
crore in FY2022 comprised income of Rs 19782 crore (Investment income FY2021: Rs
42153 crore) under the unit-linked portfolio and an investment income of Rs 6048
crore (FY2021: Rs 6004 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 42153 crore in FY2021 to Rs 19782 crore in FY2022 primarily on account
of decrease in market value of the securities held.
Other income increased from Rs 94
crore in FY2021 to Rs 115 crore in FY2022.
Total expenses (including commission)
increased by 24.8% from Rs 4916 crore in FY2021 to Rs 6137 crore in FY2022.
Commission expense (including rewards) increased by 11.5% from Rs 1500 crore in
FY2021 to Rs 1673 crore in FY2022. New business commission (including single premium)
has increased from Rs 1032 crore in FY2021 to Rs 1179 crore in FY2022. Renewal commission
has increased from Rs 398 crore in FY2021 to Rs 412 crore in FY2022. Operating expenses
of Rs 4464 crore in FY2022 (FY2021: Rs 3416 crore) comprised of unit fund
expenses (including goods and service tax on linked charges) amounting to Rs 700
crore (FY2021: Rs 669 crore) under the unit-linked portfolio. The unit fund
expenses under unit-linked portfolio is directly offset by a change in
valuation of policyholder liabilities. Operating expenses of other than unit linked
portfolio increased by 37.0% from Rs 2747 crore in FY2021 to Rs 3763 crore in
FY2022 primarily on account of increase in expenses relating to employee
remuneration and welfare benefits, advertisement and business conferences
expenses.
Claims and benefit payouts increased
by 29.7% from Rs 22641 crore in FY2021 to Rs 29359 crore in FY2022 primarily on
account of increase in surrenders/withdrawals and death claims. The Company had
COVID-19 claims (net of reinsurance) of Rs 1017 crore.
Change in actuarial liability,
including funds for future appropriation, decreased from Rs 54445 crore in
FY2021 to Rs 25814 crore in FY2022. Fund reserve, which represents liability
carried on account of units held by unit linked policyholders, decreased from Rs
41464 crore in FY2021 to Rs 12317 crore in FY2022. The decrease in fund
reserves is primarily due to lower investment income in the unit linked
portfolio. Non-unit reserve increased from Rs 12860 crore in FY2021 to Rs 13467
crore in FY2022.
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ICICI Prudential Life
Insurance: Results Standalone Policyholders Account
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2203 (3)
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2103 (3)
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Var %
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2203 (12)
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2103 (12)
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Var %
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Premium earned (net)
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11358.91
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11879.28
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-4
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36321.27
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34973.37
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4
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Income from
Investments
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1476.48
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7142.77
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-79
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24969.54
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47437.58
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-47
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Other income
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32.76
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22.79
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44
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112.59
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93.40
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21
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Contribution from the
Shareholders` account
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977.58
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593.69
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65
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2161.11
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1574.78
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37
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Total Income
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13845.73
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19638.53
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-29
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63564.51
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84079.13
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-24
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Commission
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556.43
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557.57
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0
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1672.91
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1500.22
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12
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Op. expenses related
to Insurance business
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1298.64
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853.75
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52
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3672.95
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2688.26
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37
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Others
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203.76
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182.77
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11
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719.53
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678.42
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6
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Benefits paid (Net)
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8003.79
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8317.62
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-4
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29358.84
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22640.90
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30
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Change in valuation of
policy liabilities
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2546.35
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9136.61
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-72
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25783.76
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54324.10
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-53
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Provision for taxation
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92.67
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59.67
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55
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166.15
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141.85
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17
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Total Expense
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12701.64
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19107.99
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-34
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61374.14
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81973.75
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-25
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PAT
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1144.09
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530.54
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116
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2190.37
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2105.38
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4
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Transfer to
Shareholders` account
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1068.11
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475.57
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125
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2160.22
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1984.86
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9
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ICICI Prudential Life
Insurance: Results Standalone Shareholders Account
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2203 (3)
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2103 (3)
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Var %
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2203 (12)
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2103 (12)
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Var %
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Amounts transferred
from Policyholders` account
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1068.11
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475.57
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125
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2160.22
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1984.86
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9
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Income from
investments
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166.34
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258.91
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-36
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1013.62
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768.96
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32
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Total Income
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1234.45
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734.48
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68
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3173.84
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2753.82
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15
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Expenses (apart from
Insurance)
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28.87
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24.52
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18
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102.43
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61.15
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68
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Contribution to
policyholders account
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977.58
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593.69
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65
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2161.11
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1574.78
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37
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Others
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6.91
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2.60
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166
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119.75
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36.49
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228
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Total Expenses
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1013.36
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620.81
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63
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2383.29
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1672.42
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43
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PBT
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221.09
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113.67
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95
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790.55
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1081.40
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-27
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Tax
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36.42
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49.89
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-27
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36.42
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121.25
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-70
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PAT
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184.67
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63.78
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190
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754.13
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960.15
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-21
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EPS (Rs)*
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5.1
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1.8
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5.2
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6.7
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* on current equity of
Rs 1437.31 crore of face value of Rs 10 each, PL: Profit to Loss, LP: Loss to
Profit,
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Figures in crore,
Source: Capitaline Corporate Database
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