ICICI Prudential Life Insurance has announced a 33% rise in net profit for the first quarter ending June 2023. The company reported a net profit of ₹207 crore during this period. However, the value of new business (VNB) fell by 7% to reach ₹438 crore. The VNB margin, a measure similar to profit margin for any other business, contracted by 100 basis points to reach 30% from the previous 31%. Despite the decline in VNB, the company maintained a strong 13th month persistency ratio of 86.4%, indicating the ability to retain policyholders.
The first quarter results also revealed that the new business premium experienced a decline of 4% to ₹3,051 crore. On a positive note, the assets under management (AUM) of the company rose by 15.8% to ₹2,66,420 crore, reflecting strong investment performance. However, the annualised premium equivalent (APE) saw a decrease of 3.9% to ₹1,461 crore, primarily attributable to a fall in income from savings and annuity products.
Despite the decline in APE, ICICI Prudential Life Insurance witnessed a substantial growth of 61.8% in retail APE, which amounted to ₹110 crore during Q1FY24. This demonstrates the company’s ability to generate sales through its retail channels. The managing director of ICICI Prudential Life Insurance, Anup Bagchi, expressed optimism about the business growth, highlighting a double-digit growth in APE for the month of June 2023 and strong retail APE growth for non-ICICI Bank channels in May and June 2023.
Furthermore, the solvency ratio of ICICI Prudential Life Insurance stood at 203.4%, surpassing the regulatory requirement of 150%. This indicates the company’s strong financial position and ability to meet its obligations to policyholders. The solvency ratio is a measure of an insurance company’s capital adequacy and ability to absorb unexpected losses.
In conclusion, while ICICI Prudential Life Insurance’s net profit saw significant growth, the decline in the value of new business highlights the challenges faced by the company. However, the strong persistency ratio, AUM growth, and retail APE growth indicate positive trends for the company. With a solvency ratio above the regulatory requirement, ICICI Prudential Life Insurance is well-positioned to navigate the competitive insurance market and continue to serve its policyholders with confidence.
