N S Kannan, MD & CEO, ICICI Prudential Life Insurance said, “In April 2019, we had articulated our aspiration to double the FY2019 Value of New Business (VNB) in four years. We have successfully delivered this with a VNB of Rs 27.65 billion and industry leading margin of 32per cent. This VNB was delivered along with strong quality of business as can be seen from the sharp improvements in our persistency ratios across all cohorts.”
Mumbai:
With a strong performance in the Value of New Business (VNB),ICICI Prudential Life Insurance has recorded almost a 30 per cent year-on-year(y-o-y) growth in its net profit to Rs 235 crore in q4fy2022-23.
The life insurer’s new business premium for the reporting quarter rose 18 per cent to Rs 5,635 crore against Rs 4,788 crore in the same quarter last year.
The company’s embedded value increased by 13 per cent y-o-y to Rs 35,634 crore at the end of March 2023 against Rs 31,625 crore in March 2022.
The life insurer’s Value of New Business (VNB), representing profitability, grew by 36% to Rs 1,055 crore for the March quarter against Rs 775 crore a year ago.
For the full year it rose to Rs 2,765 crore in FY2023, showing a year-on-year growth of 27.8 per cent.
The VNB margin also expanded from 28 per cent in FY2022 to 32 per cent in FY2023.
The life insurer’s return on embedded value (RoEV) was 17.4 per cent in FY2023 as compared to 11.0 per cent in FY2022.
The return of the company on EV (RoEV) was 17.4% for FY2023. Value of inforce business grew by 15.4 per cent year-on-year and stood at Rs 268.52 billion as on March 31, 2023.
The company’s Asset under Management(AUM) grew to Rs 2,511.91 billion at March 31, 2023, it signifies customer trust in the Company. The solvency ratio for FY2023 stood at 208.9 per cent, well above the minimum regulatory requirement of 150 per cent.
N S Kannan, MD & CEO, ICICI Prudential Life Insurance said, “In April 2019, we had articulated our aspiration to double the FY2019 VNB in four years. We have successfully delivered this with a VNB of Rs 27.65 billion and industry leading margin of 32.0 per cent . This VNB was delivered along with strong quality of business as can be seen from the sharp improvements in our persistency ratios across all cohorts.”
“Our strategy of pursuing a diversified distribution and a well diversified product mix has enabled us to deliver 26.5 per cent year-on-year growth in APE (APE) in Ǫ4-FY2023. 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 FY2023,’’ he said.
The company has reported significant improvement in persistency across all cohorts compared to FY2022. The 13th month persistency ratio improved by 90 basis points to 86.6 per cent in 11M-FY2023 and the 61st month persistency improved by 1130 basis points to 65.7 per cent in 11M-FY2023.
However, total investment income of the company decreased from Rs 258.30 billion in FY2022 to Rs 106.94 billion in FY2023. Investment income of the company under unit-linked decreased from Rs 197.82 billion in FY2022 to Rs42.03 billion in FY2023, primarily due to decrease in the market value of the securities held and a decrease in profits on sale of investments. Investment income under unit-linked is directly offset by change in valuation of policyholder liabilities.
Investment income under other than unit-linked increased from Rs 60.48 billion in FY2022 to Rs 64.91 billion in FY2023 primarily on account of an increase in interest income offset in part by decrease in profit on sale of investments.
The company’s total expenses (including commission) increased by 17.6 per cent from ` Rs 61.37 billion in FY2022 to Rs 72.19 billion in FY2023. Commission expense of the company increased by 11.4% from Rs 16.73 billion in FY2022 to Rs 18.64 billion in FY2023.
The life insurer’s new business commission (including single premium commission) increased from Rs11.79 billion in FY2022 to Rs 13.24 billion in FY2023 in line with growth in new business premium. The renewal commission increased from Rs 4.12 billion in FY2022 to Rs 4.28 billion in FY2023.
Claims and benefit payouts (net of reinsurance) by the company increased by 5.6 per cent from Rs 293.59 billion in FY2022 to Rs 310.04 billion in FY2023, primarily on account of increase in surrenders/withdrawals offset in part by a decrease in death claims.
The death claims, net of amount ceded in reinsurance, decreased by 35.1 per cent from ` 36.01 billion in FY2022 to Rs 23.37 billion in FY2023 primarily on account of a decline in COVID-19 related death claims.
The company had COVID-19 related death claims (net of reinsurance) of Rs 0.41 billion in FY2023 (Rs 10.17 billion in FY2022).