Despite reporting a good set of overall numbers, an accelerated provisioning of Rs 200 crore for the pandemic has crimped net profit of ICICI Prudential Life by 64.2 per cent to Rs 64 crore in the January-March quarter.
However, a Rs 7,400 crore of investment income — gains from the market–as against a loss of Rs 18,000 crore in January-March 2020 due to the pandemic, has helped it cushion the hit.
It also had a payout of Rs 265 crore, net of reinsurance for 205 claims from the pandemic deaths, chief executive and managing director N S Kannan told PTI on Monday in a post-earnings call.
With the additional Rs 200 crore provisioning for the pandemic in the March quarter, the total money set aside stands at Rs 300 crore, he said, adding taking its solvency ratio to 217 per cent (well above the regulatory requirement of 150 per cent) with zero NPAs, well protecting its embedded value which rose 26 per cent to Rs 21,100 crore.
The value of its new business premium (VNB) for the quarter jumped 26 per cent to Rs 591 crore, while the same for the full year grew 25.1 per cent to Rs 1,621 crore up from 21.7 per cent in FY20, Kannan said, adding the company returned to the growth momentum during the reporting quarter.
Net profit declined by 64.2 per cent to Rs 64 crore in January-March 2021 from Rs 179 crore for the year-ago quarter while the same for the full year slipped to Rs 960 crore from Rs 1,069 crore in the previous fiscal.
This is commendable because for the first nine months of the year its VNB was -9 per cent but in Q4 it grew 26 per cent, helping it wipe out the deficit and close the year with an overall 1 per cent growth at Rs 1,621 crore.
The company ended the fiscal 2021 with a 40 per cent growth in AUM at Rs 2.14 lakh crore, and also became the market leader among private insurers in new business sum assured with a 13 per cent market share, up from 11.8 per cent a year ago.
While the VNB margin grew to 25.1 per cent for FY21, the new APE (annualised premium equivalent) grew 27 per cent to Rs 2,509 crore on the back of a 108 per cent year-on-year growth in March 2021 to Rs 1,101 crore, and the new business sum assured grows 22 per cent while new business premium expanded 23 per cent.
The focus on maintaining balance sheet resilience through a robust risk management mechanism and investment policy has helped ensure zero non-performing assets since inception and across market cycles, Kannan said.
Despite the pandemic disruptions, the company was able to demonstrate resilience in operations. In Q4, APE grew 27 per cent with March posting the best ever monthly sales for the company in any year since inception, Kannan said.
Its traditional savings and annuity products grew 114.1 per cent and 214.7 per cent year-on respectively in Q4. As a result, VNB grew 26 per cent year-on to Rs 591 crore in Q4 while the VNB margin improved to 25.1 per cent, and the embedded value grew 26.4 per cent to Rs 29,106 crore during the year.
The company had a debt-equity mix of 55:45 at March 31, 2021. 96.8% of the debt investments are in AAA rated securities and
The company’s net worth was `Rs 9,119 crore at March 31, 2021. The solvency ratio was 216.8 per cent against regulatory requirement of 150 per cent.
Kannan attributed the good showing to well diversified product and distribution mix, and expressed hope that the company is well poised to achieve the stated objective of doubling FY2019 VNB by FY2023.
The company's board has recommended of final dividend of~ 2.00 per equity share of face value of ~ 10 each, to its shareholders.