Anup Bagchi, MD & CEO, ICICI Prudential Life Insurance
The decline in value of new business margin is primarily on account of the shift in underlying product mix towards unit linked & par (participatory ) from non par business, decline in group term business and higher expense ratio for the current year, said the company
Mumbai:
The net profit of ICICI Prudential Life Insurance, the fourth largest life insurer in the country, has fallen by 26 per cent year on year to Rs 174 crore in Q4FY24.
The new business premium(NBP) income of the insurer has grown by 16.3 per cent to Rs 6,553 crore while total premium including the renewals has risen by 16.6 per cent to Rs 15,150 crore during the reporting quarter.
However, the value of new business margin (VNB)of the life insurer has declined by 26.4 per cent to 7.76 per cent in Q4FY24.
The decline in VNB margin is primarily on account of the shift in underlying product mix towards unit linked & par (participatory ) from non par business, decline in group term business and higher expense ratio for the current year, said the company.
Continued weak demand for high-value policies post-tax implementation changes is also weighing heavily on their VNB margins, analysts said.
The company’s expenses of management rose 10 per cent to Rs 2,550 crore in the fourth quarter of FY’24, from Rs 2,320 crore at the end of the March quarter of 2022-23.
The insurer has delivered a weaker-than-expected performance in 4Q. Lower product-level margin remain a concern over the medium term. However, premium growth delivery would be key for valuation re-rating. While the business from the ICICI Bank channel has settled at 12-15% of the overall APE, strong growth in proprietary channels is expected to sustain, given the investments made over the past couple of years, said analysts
The company’s profit after tax grew by 5.1 per cent year-on-year from Rs 811 crore in FY2023 to Rs 852 crore in FY2024.
The total premium of the company was Rs 43,236 crore , up 8.3 per cent in Fy 24.
The insurer’s Value of New Business (VNB) for FY2024 was Rs 2227crore. With an APE of Rs 9046 crore for the FY2024, VNB margin for FY2024 stood at 24.6 per cent .
The Embedded Value of the life insurer grew by 18.8 per cent year-on-year from Rs 35,634 crore at March 31, 2023 to Rs 42,337 crore at March 31, 2024.
The company’s value of inforce business grew by 14.5 per cent from Rs 2,68,.52 crore at March 31, 2023 to Rs 30,7.56 crore at March 31, 2024.
The life insurer’s assets under management(AUM) grew by 17.1 per cent year-on-year from Rs 2,511.91 crore at March 31, 2023 to Rs 2,94,140 crore at March 31, 2024.
The company had a debt-equity mix of 53:47 at March 31, 2024 and 95.9 per cent of the fixed income investments were in sovereign or AAA rated instruments.
The company’s net worth was Rs11,009 crore at March 31, 2024. The solvency ratio was 191.8 per cent against the regulatory requirement of 150 per cent .
Claims and benefit payouts (net of reinsurance) increased by 29 per cent from Rs 31,004 crore in FY2023 to Rs 40,0.06 crore in FY2024, primarily on account of higher surrenders/withdrawals in the unit-linked portfolio
Anup Bagchi, MD & CEO, ICICI Prudential Life Insurance said, “Going forward we will continue to leverage technology to simplify products and processes and augment customer experience We have been strengthening our well-diversified distribution network, designing innovative products and processes and leveraging data analytics and other technology solutions to simplify the business. These are aimed at enriching the customer and distributor experience.’’
The insurer has been first life insurer in the country to offer an annuity product which provides customers the option to receive a 100 per cent refund of premiums paid. Also it is the first life insurer to pay out commissions on the same day to its distributors, said Bagchi..
For the company, the contribution of the agency and direct business channels to the retail APE stood at 51 per cent for FY2024.
“We have also deployed Machine Learning models which enable us to introduce appropriate interventions to address customer requirements. Our 13th month persistency for the full year stood at 89 per cent reflecting the customer’s trust in the company and our operational efficiency,’’ added Bagchi.
The insurer has a claim settlement ratio of 99.2 per cent in FY2024, with an average turnaround time of 1.3 days for non-investigated claims.