ICICI Prudential Life reports flat growth in net income to Rs 302 cr in Dec quarter

Mumbai, Jan 21 () Private sector life insurer ICICI Prudential Life on Tuesday reported a marginal increase in net income to Rs 302 crore, despite a 33 per cent rise in growth in new business income and a spike in margins, for the December 2019 quarter.

Its new business income jumped to Rs 426 crore in the December quarter, up 33 per cent as compared with the year-ago period at Rs 320 crore.

The company's net income remained flat at Rs 302 crore against Rs 297 crore in the December 2018 quarter, while a spike in protection portfolio helped it improve margin to 21 per cent in the reporting quarter from 17 per cent a year ago.

The company's solvency ratio stood at a healthy 207 against the regulatory requirement of 150, said N S Kannan, chief executive officer and managing director of ICICI Prudential Life.

He expressed optimism to double the new business income target of Rs 2,600 crore over the next three-four years, on the back of a healthy 25 per cent growth in this segmental income at Rs 1,135 crore as of December.

"We are on track to achieve the targets set last fiscal as we have already grown 25 per cent in our value of new business from Rs 910 crore in December 2018 to Rs 1,135 crore in December 2019," Kannan told over phone, adding that this growth was driven by a healthy growth in protection portfolio which now contributes 14 per cent of total business, up from 9 per cent last year.

Another growth driver was the falling share of unit-linked insurance plans, which fell to under 70 per cent now from over 80 per cent last year.

"Cost-efficiencies and growth in protection products have helped us improve our margins to 21 per cent in the December quarter from 17 per cent a year ago," Kannan said.

He also added that higher persistency in long-term policies, which is at an industry high of 64 per cent, is also helping the company trim customer acquisition cost.

The company has one of the lowest cost structures in the industry with a cost-to-income ratio of 11.1 per cent, down from 12 per cent in the year-ago period.

Its assets under management grew 6 per cent to Rs 1.72 lakh crore, a net incremental growth from Rs 1.65 lakh crore in the September quarter. On a nine-month basis, growth is better at 14.6 percent, Kannan said.

New business premium grew 20 per cent from Rs 6,828 crore to Rs 8,173 crore in the reporting quarter, while protection annualised premium equivalent grew 66 per cent from Rs 461 crore to Rs 764 crore and annuity business grew 88 per cent from Rs 371 crore to Rs 697 crore on a nine-months basis.

Kannan attributed the massive 66 per cent rise in protection business to innovative products, smoother customer on-boarding and easy claim settlement process.

ICICI Prudential, which employs 14,000 on its rolls and another 1.8 lakh as agents, gets 53 per cent of its business from bancassurance, 22 per cent from agents, 12.5 per cent from direct business, 7 per cent from corporate agents and a meager 2-3 per cent from online sales, he said.

During the quarter, its total premium income grew to Rs 8,264 crore from Rs 7,566 crore, while net premium income grew to Rs 8,131 crore, from Rs 7,483 crore, and the investment income grew fourfold to Rs 4,744 from Rs 1,186 crore.

The company made a claim settlement of Rs 5,391 crore up from Rs 3,325 crore.

The shares of the insurer, one of the few to have gone public, ended flat at Rs 489 on the BSE, against a 0.5 per cent correction in the Sensex. BEN HRS