A better product mix and focus on expanding high margin protection business, will help ICICI Prudential Life Insurance Company Ltd. consolidate its position among private insurers in the country, said Bank of America Merrill Lynch (BoFAML). India's largest private insurance company has been consistently gaining market share with its current market share at 28 percent.
The insurer reported a 29 percent growth in new premiums while being able to retain a larger number of existing customers, said the brokerage house. The company's persistency ratio stood at 85.7 percent for the financial year 2017 as against 82.4 percent in the last financial year.
Other Key Highlights:-
- Value of new business, grew 62 percent to Rs 6,600 crore in financial year 2016-17, compared to last year.
- Protection business which covers fatalities like death and permanent disabilities grew 87 percent, last year.
- Distribution channel mix is still dominated by Bancassurance, which contributes 57 percent of the revenue.
BofA ML has upgraded ICICI Prudential's target price to Rs 540 while maintaining its ‘buy' rating. 11 out of the 15 analysts tracking the company have a ‘buy' rating on the stock, according to Bloomberg.
ICICI Prudential was the first Indian insurance to get listed last year. The company had offered shares at Rs 334 apiece. The stock rose as much as 8 percent in early trade, marking its highest intraday gain since listing.
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