In the April-June quarter, ICICI Pru’s net profit increased by 33% to Rs 207 crore

In the April through June quarter of the current fiscal year, ICICI Prudential Life recorded a 33% increase in net income at Rs 207 crore, aided by significant investment profits.

Profiting from a healthy market, the firm reported a huge profit of Rs 16,327 crore in the reporting quarter compared to a loss of Rs 8,496 crore in the same quarter last year.

The company said in a statement that its income from unit-linked investments increased from a loss of Rs 9,888 crore in the first quarter of FY23 to a gain of Rs 14,159 crore in Q1FY24, primarily because the market value of the securities it held increased along with an increase in profits from investment sales.

 

Changes in the assessment of policyholder obligations immediately negate the income from unit-linked investments.

 

The firm said that its margin dropped 100 basis points to 30% year over year while the value of its new business (VNB) fell 7% to Rs 438 crore. Additionally, new business premium fell 4.2% to Rs 3,051 crore.

 

However, net income increased 32.7% to Rs 207 crore as a result of the company’s success in increasing cost efficiency—the cost to total weighted received premium ratio—from 27.7% to 18.8%.

 

Even though retail protection sales increased by 61.8% to Rs 110 crore and the 13th month persistency increased to 86.4%, VNB, which measures the current value of future earnings, decreased. However, the corporation could not provide an explanation for the decline in VNB.

 

The new business sum assured, a measure of the life insurance consumers choose, increased by 8.8% to Rs 2,40,304 crore during the reporting quarter thanks to a range of products and a need-based marketing strategy.

 

With no concentration risk from any one distributor, the total APE (Annual Premium Equivalent) was Rs 1,461 crore.

 

The amount of assets under management increased by 15.8% to Rs 2,66,420 crore.

 

Anup Bagchi, managing director and chief executive who took over mid-June, credited the success to the customer-centric strategy and said that the business will keep concentrating on increasing the absolute VNB.

 

According to him, the protection industry as a whole now accounts for close to a quarter of the entire APE due to the roughly 62 percent increase in the retail protection sector.