ICICI Prudential Reports Modest Profit Growth Amidst Drop in New Business Margin

ICICI Prudential Life Insurance Co. has exhibited a marginal increase in profits during its third quarter, signaling a modest upward trend in its financial performance. Despite this slight profit rise of 2% compared to the previous year, the company witnessed a notable decrease of 29% in the value of its new business, affecting the overall financial dynamics. Revealed in a recent stock exchange filing, these mixed results showcase the complexities in the insurance sector. The company's profit for the quarter ending December stood at Rs 227 crore, though this was paired with a sequential decrease of 7% when compared to the preceding quarter.

Financial Highlights

One of the primary income streams for ICICI Prudential, the net premium, saw an incremental year-on-year growth of 5%, reaching Rs 9,929 crore. Despite such growth, not all metrics were positive. The value of new business, which estimates the anticipated future profits from new policies written during the quarter, dropped significantly by 29% to Rs 436 crore. This decline was reflected in the new business margin, which contracted from 33.92% to 22.86%. However, the company's revenue painted a brighter picture, boasting a substantial 52% increase and amounting to Rs 26,648 crore.

Other Noteworthy Metrics

When evaluating a broader timespan covering the first nine months of the financial year, additional insights come to light. The 13^th month persistency ratio, a key indicator of customer retention, saw a positive shift, improving to 87.4% from 86.1%. Conversely, the 61^st month persistency experienced a slight decrease. Administrative and operational efficiencies appeared to suffer with the overall cost ratio deteriorating from 20.8% to 25.3%. The solvency ratio, an indicator of financial stability, remained above regulatory requirements at 196.5%, though this was lower than the previous year's 212.2% figure.

A closer look at the new business premium shows a minimal 2% uptick, settling at Rs 1,152.7 crore. The assets under management category enjoyed a healthier growth, witnessing a 14% increase and a total valuation of approximately Rs 2.87 lakh crore. The firm's protection, savings, and annuities segments recorded growth on an annualised premium equivalent basis, with the retail protection and annuity segments standing out with increases of 26.5% and 17.3% respectively, during the third quarter.

Highlighting its strategic product launches, ICICI Prudential introduced a pioneering annuity product noted for giving customers the option of a full premium refund. This innovative offering underlines the company's commitment to customer-centric product development.

Leadership at ICICI Prudential remains optimistic, citing the organization's tailored product offerings and resilient persistency rates as indicative of strong market performance. CEO Anup Bagchi emphasized the firm's agile approach to meeting customer needs and its dedication to efficient distribution network utilization. The company's claim settlement ratio and response time were also spotlighted as industry-leading achievements, reinforcing its position among private sector life insurers.

Despite the day's results announcement, ICICI Prudential's shares experienced a marginal decrease in the stock market, closing 0.69% lower at Rs 515 each.

profit, margin, growth