ICICI Pru Life H1 PAT up 27% on strong investment income, retail business growth

ICICI Prudential Life Insurance’s net profit rose 27 per cent yoy to ₹451 crore in H1 FY24 on the back of strong growth in investment income, and retail protection and savings products.

Value of New Business (VNB) stood at ₹1,015 crore, and VNB margin for the six-month period was 28.8 per cent. New business premium stood at ₹7,410 crore. Retail New Business Sum Assured (NBSA) grew 52 per cent yoy to ₹1.1-lakh crore, however total NBSA grew only 2.4 per cent y-o-y to ₹4.9-lakh crore for H1 FY24.

“We are focused on growing the absolute VNB with the help of our 4D framework comprising Data analytics, Diversified propositions, Digitalisation and Depth in Partnerships, to develop quality business in a risk-calibrated manner. We believe protection, given the under-penetration in the country presents a significant growth opportunity for us,” MD and CEO Anup Bagchi said.

Investment income jumped to ₹23,689 crore for the six-month period ended September from ₹4,526 crore a year ago. Investment income under unit-linked increased to ₹18,858 crore from ₹1,377 crore primarily due to increase in the market value of the securities and increase in profits on sale of investments. Investment income under unit-linked is directly offset by change in valuation of policyholder liabilities, the insurer said.

Investment income under other than unit-linked increased to ₹4,831 crore from ₹3,149 crore led by increase in profit on sale of investments and interest income.

APE growth

Annualised Premium Equivalent (APE) was ₹3,523 crore. APE for the retail protection business segment, which had been facing supply side challenges, bounced back to grow 73.7 per cent yoy. Total protection APE was at ₹734 crore, comprising 20.8 per cent of overall APE.

Linked savings products comprised 42 per cent of total APE, non-linked savings products for 27 per cent, annuity for 6.2 per cent and group savings for 4.1 per cent.

ICICI Prudential said there is with minimal concentration risk from any single distribution channel, and that a diversified distribution network is enabling it to reach out to a wider section of customers to drive growth. AUM grew 11.3 per cent yoy to ₹2.7-lakh crore as of September 30.

Persistency ratio, a measure of customer stickiness, improved across all cohorts with the 13^th month ratio rising 100 bps to 86.9 per cent and the 49^th month persistency by 220 bps to 65.8 per cent. The insurer said it has deployed an advanced machine learning model which acts as an early warning system, to further improve persistency.

Claims and benefit payouts (net of reinsurance) increased by 28.6 per cent to ₹17,410 crore on account of higher surrenders/withdrawals in the unit-linked portfolio.

The company recently launched ‘ICICI Pru Stack’, a set of platform capabilities encompassing digital tools and analytical abilities for customer, product and distribution channels to ensure that the right product reaches the right customer at the right price through the right channel. The Stack has enabled the company to issue 20 per cent of the policies on the same day for the savings line of business, it said.