ICICI Prudential Q1 Results: Profit Rises But Misses Estimates

ICICI Prudential Life Insurance Co.'s first-quarter profit rose but missed analysts' estimates.

The private insurer's net profit rose 32% year-on-year to Rs 206 crore in the quarter ended June 30, according to an exchange filing on Tuesday. That compares with the Rs 400 crore consensus estimate of analysts tracked by Bloomberg. Sequentially, the bottom line fell 12%.

The firm's net premium rose 2% year-on-year to Rs 7,020 crore.

ICICI Prudential Q1 FY24 Highlights (YoY)

• Value of new business—the present value of the future profits associated with new business written during the period—fell 7% to Rs 438 crore.

• VNB margin contracted to 30% from 31%.

• Revenue was Rs 23,541 crore, as against a negative revenue of Rs 1,461 crore last year due to a loss in investment income.

• The 13^the and 61st-month month persistency ratios—or customer retention—by premium improved to 84.4% and 63% from 82.7% and 61.5%, respectively.

• The overall cost ratio remained elevated. It worsened to 27.7% from 23.8%.

• The solvency ratio—which measures the extent to which assets cover commitments for future liabilities—declined to 203.4% from 203.6% in June last year and 208.9% as of March. This is, still, above the minimum requirement of 150%.

• The new business premium received fell 4% to Rs 3,051 crore.

• Share of non-linked savings, linked savings, protection, annuity, and group savings accounted for 27.7%, 38.8%, 6.2%, and 3.8% of the annualised premium equivalent, respectively.

• Protection reported a growth of 4%, while savings fell 6% and annuities fell by 7% on an APE basis.

• Assets under management rose around 16% to Rs 2.7 lakh crore.

"With customer-centricity at the core, we will continue to focus on growing the absolute VNB, through the 4P strategy comprising premium growth, protection focus, persistency improvement, and productivity enhancement," Anup Bagchi, chief executive officer of ICICI Prudential, said.

Through the first quarter, Bagchi said they observed an improving trend in business, with double-digit growth in the APE for June.

"Our efforts towards expanding the protection business are visible in the 62% year-on-year growth in the retail protection segment, and this has led to the overall protection business contributing nearly a quarter of the total APE," he said. "Further, our well-diversified distribution network has ensured we have minimal concentration risk from any single distributor."

Shares of ICICI Prudential fell 1.19% on the BSE after the results at 1.52 p.m., compared to a 0.26% gain in the benchmark Sensex.