ICICI Prudential Life Insurance Q1 net profit flat at Rs 286.9 crore
The annualised premium equivalent was Rs 823 crore in Q1 compared to Rs 1,470 crore in the year-ago period.
July 21, 2020 / 05:22 PM IST
Private life insurer ICICI Prudential Life Insurance's Q1 FY21 net profit was flat at Rs 286.86 crore. The insurer had posted a profit after tax of Rs 284.64 crore in the year-ago period.
The annualised premium equivalent (APE) was Rs 823 crore in Q1 compared to Rs 1,470 crore in the year-ago period. APE refers to 100 percent of the regular premiums and 10 percent of single premiums.
Value of New Business (VNB) for Q1 was Rs 210 crore, showing a decline of 35 percent on a YoY basis. With an APE of Rs 823 crore for the Q1FY21, VNB margin was 24.4 percent for Q1FY21.
VNB is the present value of expected future earnings from new policies written during a specified period and it reflects the additional value to shareholders expected to be generated through the activity of writing new policies during a specified period.
N S Kannan, MD & CEO, ICICI Prudential Life Insurance said, "The COVID-19 pandemic has had an impact on the way consumers perceive life insurance and protection products have therefore seen an increased demand. Even with the movement restrictions in the last quarter, the share of protection in our portfolio increased to 26 percent of Annualised Premium Equivalent (APE). This resulted in an expansion in the VNB margin from 21 percent for Q1FY21 to 24.4 percent in Q1F21."
In the earnings call, Satyam Jambunathan explained that the company has received 69 claims so far from the Coronavirus outbreak. He added that the overall claims have declined this year compared to last year.
The total assets under management at the end of June 30 stood at Rs 1.7 lakh crore. The insurer had a debt-equity mix of 57-43 at June 30, 2020. Here, 94.3 percent of the debt investments are in AAA rated and government bonds.
"We want to double our FY19 VNB in three to four years time. We will go on that path in an unwavering way," said Kannan.
The solvency ratio was 205.1 percent against regulatory requirement of 150 percent.
Going forward, Kannan said that the focus will be on increasing the protection product mix. He added that the drop in average ticket size for the company has been due to this, especially since term plan premiums are lower than that of unit-linked insurance plans.