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Results
18-Jan-24
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Analysis
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ICICI Prudential Life Insurance Company
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Moderate premium collection growth, VNB declines
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ICICI Prudential Life Insurance Company has posted 3% rise in the
net profit of Rs 227.47 crore in the quarter ended December 2023 (Q3FY2024).
The
Company registered 5% growth in net premium income in Q3FY2024. The commission
expenses jumped 156% and operating expense declined 16%. Benefits paid moved up
16% in Q3FY2024.
Value
of New Business (VNB) declined 29% to Rs 436 crore for Q3FY2024 over Q3FY2023. VNB margin declined to 26.7% in 9MFY24 from 32%
in 9MFY23. APE rose 5% to Rs 1907 crore for Q3FY2024. New business
premium moved up 5% to Rs 4117 crore for Q3FY2024.
The Company
has a well-diversified product mix with 9MFY2024 APE contribution from linked,
non-linked, protection, annuity and group funds at 42.4%, 26.6%, 20.8%, 6.2%
and 4.1% respectively.
Protection
APE grew by 3.4% year-on-year from Rs 710
crore in 9MFY2023 to Rs 734
crore in 9M FY2024. Retail protection business APE registered a strong growth
of 73.7% year-on-year from Rs 137
crore in 9MFY2023 to Rs 238
crore in 9MFY2024.
The Company has a well-diversified product mix with 9MFY2024 APE
contribution from linked at 43.1%, non-linked 26.9%, protection 20.1%, annuity
6.2% and group funds 3.7%.
Protection APE grew by 4.0% year-on-year from Rs 1050 crore in 9MFY2023
to Rs 1092 crore in 9MFY2024. Retail Protection business APE registered a
strong growth of 55.9% year-on-year from Rs 220 crore in 9MFY2023 to Rs 343
crore in 9MFY2024.
As a result, retail new business sum assured grew by 43.7% year-on-year
from Rs
114062 crore in 9MFY2023 to Rs 163949
crore in 9MFY2024. The overall new business sum assured increased by 4.4%
year-on-year from Rs 692193
crore in 9MFY2023 to Rs 722849
crore in 9MFY2024.
Savings APE (other than annuity business) grew by 1.2% year-on-year from
Rs 3954 crore in 9MFY2023 to Rs 4000 crore in 9MFY2024.
Persistency ratios have significantly improved across all cohorts,
reflective of the Company’s strong focus on improving the quality of business.
The 13th month persistency improved from 86.1% in 8MFY2023 to 87.4% in 8MFY2024.
The 49th month persistency ratio also improved from 63.9% in 8MFY2023 to 67.1%
in 8MFY2024.
Cost metrics In 9MFY2024, the cost to total weighted received premium
(TWRP) ratio for the savings business and the overall cost to TWRP ratio stood
at 16.3% and 25.3% respectively. In the current financial year, the Company has
been investing in building for sustainable future growth.
The assets under management of the Company grew by 13.8% year-on-year
from Rs 251884 crore at December 31, 2022 to Rs 286676 crore at December 31,
2023. The Company had a debt-equity mix of 52:48 at December 31, 2023 and 96.4%
of the fixed income investments were in sovereign or AAA rated instruments.
The Company’s net worth was Rs 11075 crore at December 31, 2023. The
solvency ratio was 196.5% against the regulatory requirement of 150%.
The Embedded Value per share stood at Rs 272.2 end December 2023.
Anup Bagchi, MD & CEO, ICICI Prudential Life Insurance said, “The
Company registered a robust year-on-year growth of 17.9% in Profit After Tax to
Rs 679 crore for 9MFY2024. The Value of New Business stood at Rs 1451 crore
with a margin of 26.7%. Our 4D framework of Data Analytics, Diversified
Propositions, Digitalisation and Depth in Partnerships has enabled us to align
our products, processes and multi-channel distribution network to one goal –
deliver value proposition to our customers.
As a customer-first brand, innovation in products and processes has been
a focus area for the Company and is aimed at meeting the varying customer needs
along with providing a best-in-class customer experience. On the product front,
we introduced ICICI Pru Guaranteed Pension Plan Flexi with Benefit Enhancer,
the industry’s first annuity product which provides customers the option to
receive a 100% refund of premiums paid. The interplay of technology and process
has enabled us to simplify the buying journey. Notably, we issued approximately
40% of policies on the same day, in Q3FY2024, to customers purchasing long-term
savings products.
Our approach of delivering the right product to the right customer has
yielded the desired results, which is reflected in our 13th and 49th month
persistency of 87.4% and 67.1% respectively at December 31, 2023. It is also
visible in our claim settlement ratio of 98.1% in Q2FY2024, with an average
turnaround time of 1.27 days, putting us at the top position among private
sector life insurers.
A multi-channel distribution network is crucial, it provides the last
mile connectivity to customers. Significantly, our robust digital
infrastructure has enabled us to pay out commissions to select advisors on the
same day the policy is issued. Besides, we are deep mining our distribution
networks’ customer base to better understand their needs and offer relevant
products, leading to increased efficiencies and capacity building for our distribution
network. We believe this can position us as the most preferred life insurer to partner
with.”
Financial Performance 9MFY2024
The Company’s Profit After Tax (PAT) grew by 17.9% year-on-year from Rs 576
crore in 9MFY2023 to Rs 679 crore in 9MFY2024. Value of New Business (VNB) for 9MFY2024
was Rs 1451 crore. With an APE of Rs 5430 crore for the 9MFY2024, VNB margin
for 9MFY2024 stood at 26.7%. The decline in VNB margin is primarily on account
of the shift in underlying product mix from non-participating business to unit
linked & participating business, decline in group term business and higher
expense ratio for the current year.
New business premium grew by 2.1% year-on-year from Rs 11287 crore in 9MFY2023
to Rs 11527 crore in 9MFY2024.
Net premium earned (gross premium less reinsurance premium) increased by
4.0% from Rs 25930 crore in 9MFY2023 to Rs 26971 crore in 9MFY2024.
Total investment income increased from Rs 12378 crore in 9MFY2023 to Rs 40188
crore in 9MFY2024.
Investment income under unit-linked increased from Rs 7595 crore in 9MFY2023
to Rs 32870 crore in 9MFY2024. Investment income under unit-linked is directly
offset by change in valuation of policyholder liabilities. Increase in
investment income is primarily on account of increase in market value of the
securities held coupled with increase in profit on sale of investments.
Investment income under other than unit-linked increased from Rs 4783
crore in 9MFY2023 to Rs 7319 crore in 9MFY2024 primarily on account of increase
in profit on sale of investments and interest income.
Other income increased from Rs 109 crore in 9MFY2023 to Rs 164 crore 9MFY2024.
Total expenses (including commission and interest on sub debt) increased
by 24.8% from Rs 4698 crore in 9MFY2023 to Rs 5861 crore in 9MFY2024.
Commission expense increased by 94.2% from Rs 1110 crore in 9MFY2023 to
Rs 2156 crore in 9MFY2024. New business commission (including single premium
commission) increased from Rs 752 crore in 9MFY2023 to Rs 1533 crore in 9MFY2024
primarily on account of redesign of our commission structure pursuant to the
IRDAI (Payment of Commission) Regulations, 2023 issued on March 31, 2023.
Renewal commission increased from Rs 287 crore in 9MFY2023 to Rs 299 crore in 9MFY2024.
Operating expenses increased by 3.3% from Rs 3526 crore in 9MFY2023 to Rs
3643 crore in 9MFY2024. Operating expenses includes unit fund expense
(including goods and service tax on linked charges) amounting to Rs 507 crore (9MFY2023:
Rs 497 crore) under the unit-linked portfolio. The unit fund expense 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 3.5% from Rs 3029 crore in 9MFY2023 to Rs 3136 crore in 9MFY2024.
Claims and benefit payouts (net of reinsurance) increased by 23.6% from
Rs 22243 crore in 9MFY2023 to Rs 27490 crore in 9MFY2024, primarily on account
of higher surrenders/withdrawals in the unit-linked portfolio. The claims and
benefits under the unit-linked portfolio are directly offset by changes in the
valuation of policyholder liabilities.
Change in actuarial liability, including funds for future appropriation,
increased from Rs 10759 crore in 9MFY2023 to Rs 33212 crore in 9MFY2024. Change
in fund reserve, which represents change in liability carried on account of
units held by unit-linked policyholders, increased from Rs (626) crore in 9MFY2023
to Rs 20293 crore in 9MFY2024. The increase in change in fund reserves is primarily
on account of higher investment income in the unit linked portfolio. Non-unit
reserve increased from Rs 11136 crore in 9MFY2023 to Rs 13189 crore in 9MFY2024.
The Company`s approach of offering the right product to the right
customer at the right price has led to the retail protection and annuity
segments growing by 26.5% and 17.3% respectively in Q3FY2024. Specifically, the
Retail New Business Sum Assured (NBSA) grew by 43.7% year-on-year to Rs 1.6 lakh
crore in 9MFY2024. The total in-force sum assured grew by 17.3% year-on-year to
Rs 32.3 lakh crore end December 2023.
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ICICI Prudential Life
Insurance: Results Standalone Policyholders Account
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2312 (3)
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2212 (3)
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Var %
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2312 (9)
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2212 (9)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Premium earned (net)
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9928.77
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9464.51
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5
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26971.21
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25930.42
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4
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38559.53
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36321.27
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6
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Income from
Investments
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16315.20
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7721.84
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111
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39285.03
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11869.89
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231
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9964.58
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24969.54
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-60
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Other income
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53.35
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36.57
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46
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149.77
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107.95
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39
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151.59
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112.59
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35
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Contribution from the
Shareholders` account
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350.45
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312.21
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12
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1309.82
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1070.03
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22
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1802.43
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2161.11
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-17
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Total Income
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26647.77
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17535.13
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52
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67715.83
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38978.29
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74
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50478.13
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63564.51
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-21
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Commission
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1001.70
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391.38
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156
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2156.05
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1110.37
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94
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1863.89
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1672.91
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11
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Op. expenses related
to Insurance business
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878.64
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1044.49
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-16
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3142.06
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3016.40
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4
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4583.23
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3672.95
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25
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Others
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168.26
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191.01
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-12
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490.66
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518.05
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-5
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723.53
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719.53
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1
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Benefits paid (Net)
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10079.68
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8709.13
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16
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27489.81
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22243.50
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24
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31004.16
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29358.84
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6
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Change in valuation of
policy liabilities
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14103.73
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6623.88
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113
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33482.43
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10509.98
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219
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9816.96
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25783.76
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-62
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Provision for taxation
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34.00
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50.50
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-33
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71.53
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137.16
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-48
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184.23
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166.15
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11
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Total Expense
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26266.01
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17010.39
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54
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66832.54
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37535.46
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78
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48176.00
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61374.14
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-22
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PAT
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381.76
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524.74
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-27
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883.29
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1442.83
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-39
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2302.13
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2190.37
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5
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Transfer to
Shareholders` account
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409.81
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411.85
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0
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1154.07
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1193.91
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-3
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2016.18
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2160.22
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-7
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ICICI Prudential Life
Insurance: Results Standalone Shareholders Account
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2312 (3)
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2212 (3)
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Var %
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2312 (9)
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2212 (9)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Amounts transferred
from Policyholders` account
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409.81
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411.85
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0
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1154.07
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1193.91
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-3
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2016.18
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2160.22
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-7
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Income from
investments
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196.46
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239.26
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-18
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956.13
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617.93
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55
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877.37
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1013.62
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-13
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Total Income
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606.27
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651.11
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-7
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2110.20
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1811.84
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16
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2893.55
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3173.84
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-9
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Expenses (apart from
Insurance)
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23.72
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26.05
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-9
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75.62
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73.79
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2
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102.17
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102.43
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0
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Contribution to
policyholders account
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350.45
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312.21
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12
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1309.82
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1070.03
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22
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1802.43
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2161.11
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-17
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Others
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0.00
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87.93
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-100
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35.87
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87.93
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-
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92.05
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119.75
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-23
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Total Expenses
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374.17
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426.19
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-12
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1421.31
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1231.75
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15
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1996.65
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2383.29
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-16
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PBT
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232.10
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224.92
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3
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688.89
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580.09
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19
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896.90
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790.55
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13
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Tax
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4.63
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4.29
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8
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10.26
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4.29
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139
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86.23
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36.42
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137
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PAT
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227.47
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220.63
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3
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678.63
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575.80
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18
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810.67
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754.13
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7
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EPS (Rs)*
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6.3
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6.1
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6.3
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5.3
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5.6
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5.2
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Embedded Valued (Rs)
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272.2
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232.8
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272.2
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232.8
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272.2
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232.8
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* on current equity of
Rs 1440.06 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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