ICICI Prudential Life June quarter net profit marginally up at Rs 288 crore

New Delhi: ICICI Prudential Life Insurance on Tuesday posted marginal 0.9 per cent increase in net profit to Rs 288 crore for the quarter ending June compared to that of Rs 285 crore in the same period of the previous fiscal.

The new business premium income fell by 32.6 per cent to Rs 1,499 crore from Rs 2,226 crore in the year-ago quarter, the private sector life insurer said in a release

The challenges brought about by the pandemic had an impact on new business premium during the quarter, the company said.

"The annuity new business premium registered a growth of 13.1 per cent from Rs 1.91 billion in Q1-FY2020 to Rs 2.16 billion during Q1-FY2021," it said.

The company's value of new business (VNB) fell by 35 per cent to Rs 201 crore in the April-June quarter of 2020-21 from Rs 309 crore in the year ago period. VNB is used to measure profitability of the new business written in a period.

"Even with the movement restrictions in the last quarter, the share of protection in our portfolio increased to 26 per cent of Annualised Premium Equivalent (APE). This resulted in an expansion in the VNB margin from 21 per cent for Q1-FY2020 to 24.4 per cent for Q1-FY2021.

"Customers trust us to help them achieve their long-term financial goals and despite volatile markets our assets under management grew by 3.6 per cent to Rs 1.7 trillion for the quarter ended June 2020," N S Kannan, MD & CEO, ICICI Prudential Life Insurance said.

APE is a measure of new business written by a life insurance company.

He said company's robust digital platform enabled it to quickly adapt to changes in business environment without any disruption and it will further strengthen the multi-channel distribution network to increase its presence in largely under-penetrated protection opportunity in India.

"...We entered into a bancassurance partnership with IDFC First Bank Ltd for the distribution of our entire suite of protection and long-term savings products," Kannan said.

With a new business sum assured of Rs 93,757 crore for the quarter, the company has achieved a market leadership position, which is an endorsement of customers' belief, its innovative products and customer-centric initiatives, the company said.

A robust risk management mechanism and investment policy, has ensured zero non-performing assets (NPAs) since inception and across market cycles. The company's solvency ratio for the quarter stood at 205 per cent, well above the regulatory requirement of 150 per cent.

The 13th and 49th month persistency ratios have been range-bound and stood at 84.1 per cent and 66.2 per cent respectively at June 30, 2020. Persistency ratio gauges the quality of business by representing the percentage of retail policies (where premiums are expected) that continue paying premiums.

ICICI Prudential Life shares closed at Rs 445.40 on BSE, up 2.11 per cent from the previous close.