ICICI Prudential Life Q4 Results: Profit Rises 26% In Line With Estimates

ICICI Prudential Life Insurance Co.'s fourth-quarter profit rose 26% year-on-year, and was in line with analyst estimates.

The private insurer's net profit stood at Rs 235 crore in the quarter ended March, according to its exchange filing. That compares with the Rs 223-crore consensus estimate of analysts tracked by Bloomberg.

The company earned a net premium of Rs 12,629 crore, an 11% increase from the year ago period. Gross renewal premiums as well as new business premiums—both single premiums and first-year premiums—saw a rise over the March quarter in the previous year.

ICICI Prudential Life Q4 FY23 Highlights (YoY)

• Revenue stood at Rs 11,500 crore, down 17% from a year ago. (Bloomberg estimate: Rs 18,117 crore).

• The 13th and 61st-month persistency ratios, or customer retention by premium, improved to 84.2% and 64.1% from 82.2% and 53.8%, respectively.

• Solvency ratio, which measures the extent to which assets cover commitments for future liabilities, stood at 208.9% from 204.5% last year, while it was 212.2% in the December quarter. It is above the minimum requirement of 150%.

The board has recommended a final dividend of Rs 0.6 per share of face value Rs 10 each.

Yearly Highlights

• Value of new business—present value of the future profits associated with new business written during the period— grew 27.8% to Rs 2,765 crore.

• VNB margin expanded to 32% from 28%.

• Embedded value stood at Rs 35,634 crore versus Rs 31,625 crore, expanding 12.7%.

• After-tax profit was up 7% at Rs 813 crore.

• The company's overall cost ratio remained elevated; it went up to 21.5% from 18.6%.

• Persistency ratios have improved across all cohorts with the 13th-month persistency at 86.6% and the 61st month at 65.7%.

• New business premium grew 12.5% to Rs 16,922 crore.

• Assets under management grew 4.4% to Rs 2.5 lakh crore.

• Share of non-linked savings, linked savings, protection, annuity and group savings accounted for 37.3%, 35.9%, 17.4%, 5.9% and 3.5% of the annualised premium equivalent, respectively.

• Annuity reported a growth of 69%, followed by protection, which grew 14.5% and savings rose by 8.3% on an APE basis.

"In April 2019, we had articulated our aspiration to double the FY19 value of new business in four years," NS Kannan, managing director and chief executive officer, said in a statement. "It gives me immense pleasure to state that we have successfully delivered this with a VNB of Rs 2,765 crore and industry leading margin of 32.0%."

He said there were also "sharp improvements in our persistency ratios across all cohorts".

"A well-diversified product mix has enabled us to deliver 26.5% year-on-year growth in annualised premium equivalent in Q4 FY23," Kannan said. "Our focus on protection and annuity products is reflected in the growth in these segments."

These products together now contribute nearly half of the new business received premium for FY23, he said.