21 Jan 2020

ICICI Prudential Life declares results for nine months ended 31 December 2019

Links to supplementary information about this release:
Full news release

Performance Highlights

• Value of New Business (VNB) grew by 25% from ₹ 9.10 billion for 9M- FY2019 to ₹ 11.35 billion for 9M-FY2020
• Protection Annualised Premium Equivalent (APE) grew by 66% from ₹ 4.61 billion in 9M-FY2019 to ₹ 7.64 billion in 9M-FY2020 and is 14.1% of APE in 9M-FY2020
• New business received premium grew by 20% from ₹ 68.28 billion for 9M- FY2019 to ₹ 81.73 billion for 9M-FY2020
• Annuity business grew by 88% from ₹ 3.71 billion for 9M-FY2019 to ₹ 6.97 billion for 9M-FY2020

Mr. N S Kannan, MD & CEO of ICICI Prudential Life said, “As articulated earlier, our aspiration is to double the FY2019 Value of New Business (VNB) in 3-4 years. In that context, I am happy to report that we are on track and have been able to grow the VNB by 25% year on year to ₹ 11.35 billion for 9M-FY2020.”

Mr. Kannan further said, ”Protection business grew by 66% year on year in the nine months of this financial year, based on our innovative products backed by technology, strong brand, seamless customer on-boarding and best-in-class claim settlement process. During the quarter, we introduced an innovative protection product, Precious Life, the industry’s first term plan specifically designed for customers who find it difficult to get access to life cover due to existing health conditions. Our other focus area, annuity business, also grew by 88% in the same period. To ease the life verification process for senior citizens, we recently introduced instant Digital Life Verification for our annuity customers.”

• Premium
  New business received premium registered a healthy growth of 20% from ₹ 68.28 billion for 9M-FY2019 to ₹ 81.73 billion for 9M-FY2020. Annuity new business grew by 88% from ₹ 3.71 billion for 9M-FY2019 to ₹ 6.97 billion for 9M-FY2020.

• Protection
  Protection APE registered a robust growth of 66% from ₹ 4.61 billion in 9M-FY2019 to ₹ 7.64 billion in 9M-FY2020. The protection mix improved from 8.6% of APE in 9M- FY2019 to 14.1% of APE in 9M-FY2020.

• Persistency¹
  The 13^th month and 49^th month persistency (excluding group and single premium policies) stood at 83.1% and 64.3% respectively at December 31, 2019. Retail renewal premium registered a growth of 5.0% from ₹ 136.09 billion for 9M-FY2019 to ₹ 142.87 billion for 9M-FY2020.
  
  Assets under management grew 14.6% to ₹ 1,719.53 billion in 9M-FY2020.

• Productivity
  The Cost/TWRP for the savings business improved from 12.0% for 9M-FY2019 to 11.1% in 9M-FY2020.

Operational Metrics:

¹ As per IRDA circular dated January 23, 2014; excluding group and single premium policies; for policies issued during December to November period of relevant year measured at December 31, 2019

Definitions, abbreviations and explanatory notes

• Annual Premium Equivalent (APE): APE is a measure of new business written by a life insurance company. It is computed as the sum of annualised first year premiums on regular premium policies, and ten percent of single premiums, written by the Company during any period from new retail and group customers.
• Value of New Business (VNB) and VNB margin: VNB is used to measure profitability of the new business written in a period. It is present value of all future profits to shareholders measured at the time of writing of the new business contract. Future profits are computed on the basis of long term assumptions which are reviewed annually. VNB is also referred to as NBP (new business profit). VNB margin is computed as VNB for the period/APE for the period. It is similar to profit margin for any other business.
• Persistency: It is the most common parameter for quality of business representing the percentage of retail policies (where premiums are expected) that continue paying premiums. The method of computation of Persistency has been prescribed by IRDAI vide its circular dated January 23, 2014.
• Total Weighted Received Premium (TWRP): TWRP is a measure of total premiums from new and existing retail and group customers received in a period. It is sum of first year and renewal premiums on regular premium policies and ten percent of single premiums received from both retail and group customers by Company during the period.
• Cost Ratio: Cost ratio is a measure of the cost efficiency of a Company. Expenses are incurred by the Company on new business as well as renewal premiums. Cost ratio is computed as a ratio of all expenses incurred in a period comprising commission, operating expenses, provision for doubtful debts and bad debts written off to total weighted received premium (TWRP).

About ICICI Prudential Life Insurance

ICICI Prudential Life is promoted by ICICI Bank Ltd. and Prudential Corporation Holdings Ltd., headquartered in United Kingdom. The Company began operations in fiscal 2001 and has consistently been amongst the top private sector life insurance companies in India on a Retail Weighted Received Premium (RWRP) basis.

The Company offers and array of products in the Protection and Savings category which match the different life stage requirements of customers, enabling them to provide a financial safety net to their families as well as achieve their long term financial goals. The digital platform of the Company provides a paperless on- boarding experience to customers, empowers them to conduct an assortment of self-service transactions, provides a convenient route to make digital payments for purchasing and making renewal premium payments, facilitates a hassle free claims settlement process etc.

ICICI Prudential Life is the first private life insurance company to cross the ₹1 trillion mark for Assets under Management (AUM). At December 31, 2019, the Company had an AUM of ₹1719.53 billion and a Total Sum Assured of approx. ₹13.60 trillion. ICICI Prudential Life is listed on both National Stock Exchange (NSE) and The Bombay Stock Exchange (BSE).

Disclaimer

Except for the historical information contained herein, statements in this release which contain words or phrases such as 'will', ‘expected to’, etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the actual growth in demand for insurance and other financial products and services in the countries that we operate or where a material number of our customers reside, our ability to successfully implement our strategy, including our use of the Internet and other technology our exploration of merger and acquisition opportunities, our ability to integrate mergers or acquisitions into our operations and manage the risks associated with such acquisitions to achieve our strategic and financial objectives, our growth and expansion in domestic and overseas markets, technological changes, our ability to market new products, the outcome of any legal, tax or regulatory proceedings in India and in other jurisdictions we are or become a party to, the future impact of new accounting standards, our ability to implement our dividend policy, the impact of changes in insurance regulations and other regulatory changes in India and other jurisdictions on us. ICICI Prudential Life insurance undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof. This release does not constitute an offer of securities.

For further press queries please write to corporatecommunications@iciciprulife.com.

1 billion = 100 crore