Highlights:

The company has continued to deliver consistent all-round performance and be ranked amongst the top three life insurers in the industry.

Individual WRP of the company increased 16% in FY22 with a market share of 14.8% and 9.3% in the private and overall sector respectively.

During the 2 year pandemic, 2 year CAGR of 17% for the company was almost 2 times industry growth of 9%.

The renewal premium has increased 18%, while the company has improved 13-61 month persistency by 200 bps – 500 bps to 92% - 58% n FY2022.

Overall protection grew by 24% in terms of APE and 47% in terms of new business premium, largely led by a 55% growth in credit life new business premium, on the back of higher disbursements.

On the retirement side, annuity business recorded 24% growth against industry growth of 3%. Annuities now contribute over a fifth of new business premiums, and has almost doubled business in the last 3 years.

All channels continued to perform well, with bancassurance growing by 13% this year and 21% based on 2 year CAGR.

Proprietary distribution, which includes agency, direct and online channels, grew by 18% in FY2022 and 11% based on 2 year CAGR, based on individual APE.

Agency channel grew by 26%. The channel added more than 40,000 agents in FY22, which is the second highest amongst private players.

The company is also focusing on building a women Financial Consultant model which it believes would give higher activation, retention and productivity.

The company has covered 54 million lives in FY22, registering an increase of 36% over FY21.

It settled close to 3.9 lakh claims during FY22. Gross and net claims were at Rs 5804 crore and Rs 4328 crore respectively for FY22.

The company carry reserves of Rs 55 crore into FY23 as a prudent measure towards Covid.

New business margin for FY22 was 27.4% up from 26.1% for FY21. Value of new business increased 22% to Rs 2,675 crore in FY2022. VNB has grown at a 24% CAGR over the past 5 years and has almost tripled in the last 5 years.

The company sees scope to improve new business margins to 30% over the next two-years, assuming no change in regulations and no loss in market share.

Embedded Value was Rs 30048 crore end March 2022, while the company has been able to almost double EV in the last 4 years.

Operating return on EV, after factoring excess mortality reserve or EMR created during FY22, was at 16.6% and without EMR was at 19.0% as against 18.5% for FY21.

PAT for FY22 was at Rs 1,208 crore, a decline of 11% vs FY21 due to higher mortality reserve created during the year.

Post wave 2, PAT in Q3 and Q4 improved steadily, with PAT for Q4 registering a 12% YoY growth.

The Board has recommended a dividend of Rs. 1.70 per share, translating to a payout of about 30% of our PAT, in line with our dividend payout ratio of FY21 and earlier.

Solvency stood at 176%, post the cash payout of Rs 726 crore to Exide Industries, as part-consideration for the acquisition of Exide Life, eating into solvency by 1300 bps.

In order to further strengthen solvency to fuel growth, the company will continue evaluating raising capital through a mix of equity and debt.

The company plans to raise a sub-debt of Rs 350 crore, which would increase solvency by 6%.

The subsidiary, Exide Life recorded a healthy growth of 22% based on individual WRP in FY22, well-above the overall industry growth of 16%. Its Embedded value was Rs 2910 crore. The merger process has been initiated with NCLT and is expected to be completed in the second half of FY2022.

The company aims to remain margin neutral at the merged company level by the end of FY23 and resume margin expansion thereafter.

A new IRDAI Chairman was appointed in Q4FY22 and unveiled his vision for the sector. The company remains very optimistic, given the new plans of IRDA with respect to the development of the sector.

The company is optimistic of double digit growth in individual WRP with risk calibrated manner.

The credit protect segment is seeing traction.

The company expects to grow protection business in FY2023 and has taken various steps.

The company sees protection and retirement as multi-decade opportunities.

The company continues efforts to remain close to customer needs.

Mortality assumption change impacted EV, but its not recurring impact.

Negative eco variance impact on EV is due to higher rise in interest rate at shorter end.

With regard to LIC listing, its positive that largest insurers is getting listed. There may be short term turbulence in terms of FII re-positioning. However, LIC growth is lagging private insurers growth. LIC operating in different segment looking at ticket size. Also, sector provides lot of growth opportunities due to low insurance penetration in India.

The insurance sector would also grow at 2x of GDP growth.

The company expects consolidated margin to be flat for FY23 over FY2022.

Growth would support profitability, cost would not rise faster.

The company is targeting double digit growth in retail protection, which would also add to profit.

Pension fund AUM has increased 73% to Rs 28414 crore, while pension fund subsidiary ranked number 1 in funds performance with 37% market share. Its top private pension FM contributing to annuity business of the company.