ICICI Prudential Q3 Results: Profit Up 2%, New Business Margin Falls By 11%

ICICI Prudential Life Insurance Co.'s third quarter profit increased 2% year-on-year, even as its of new business declined 29%.

The private insurer's net profit stood at Rs 227 crore in the quarter ended December, according to an exchange filing on Wednesday. Sequentially, the bottom line contracted 7%.

The firm's net premium rose 5% year-on-year to Rs 9,929 crore.

ICICI Prudential Q3 FY24 Highlights (YoY)

• Value of new business—the present of the future profit associated with new business written during the period—fell 29% to Rs 436 crore.

• VNB margin contracted to 22.86% from 33.92%.

• Revenue was up 52% at Rs 26,648 crore.

Other Highlights (Nine months of FY24, YoY)

• The 13^th month persistency ratio—or customer retention—by premium improved to 87.4% from 86.1%, while for the 61^st month, it declined to 64.9% from 64.2%, according to its financials.

• The overall cost ratio worsened to 25.3% from 20.8%.

• The solvency ratio—measuring the extent to which assets cover commitments for future liabilities—fell to 196.5%, from 212.2% in December last year. This is still above the minimum requirement of 150%.

• The new business premium received rose 2% to Rs 1,152.7 crore.

• Asset under management rose around 14% to Rs 2.87 lakh crore.

• Protection reported a growth of 4%, savings rose 1% and annuities were up 0.6% on an annualised premium equivalent basis.

Retail protection and annuity segment grew 26.5% and 17.3%, respectively, in Q3 FY24, the company said in its exchange filing. The total in-force sum assured grew by 17% year-on-year to Rs 32,300 crore, as of Dec. 31, 2023.

It introduced ICICI Pru Guaranteed Pension Plan Flexi with Benefit Enhancer, the industry’s first annuity product which provides customers the option to receive 100% refund of premium paid in Q3, the filing said.

"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 Dec. 31, 2023. It is also visible in our claim settlement ratio of 98.1% in Q2-FY24, with an average turnaround time of 1.27 days, putting us at the top position among private sector life insurers," Anup Bagchi, chief executive officer of ICICI Prudential, said.

"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,” he said.

Shares of ICICI Prudential closed 0.69% lower at Rs 515 apiece on the BSE before the results were announced, as compared with a 2.23% decline in the benchmark Sensex.