M Saraswathy Moneycontrol News
Private life insurer ICICI Prudential Life Insurance is looking to further grow its protection and savings business. The insurer saw a 87.1 percent growth in FY17 in protection business to Rs 260 crore in terms of annualised premium equivalent (APE).
Sandeep Batra, Executive Director, ICICI Prudential Life in his post earnings call with analysts said that retail protection accounted for Rs 209 crore of the business in FY17, seeing a big jump from Rs 94 crore in FY16.
"India has one of the highest protection gaps among other countries. This gives us an opportunity to grow this business," he added.
APE refers to regular premiums plus 10 percent of single premiums in any given year. Savings APE stood at Rs 6364 crore in FY17, showing an increase of 26.5 percent over the previous fiscal. For the insurer, bancassurance is the largest channel contributing 56.9 percent of the APE. Agency contributed 23.3 percent while direct channel was at 11.9 percent in terms of the channel mix.
For the insurer, persistency (rate of renewals) increased across buckets including 13th month, 25th month, 37th month and 61st month. Batra said that the persistency for the 49th month saw a slight dip since the insurer had begun focussing on persistency only since the last three years and this was a business written before that.
He added that the 61st month persistency rise was on account of the 2010 unit-linked insurance policies regulations which had made minimum lock-in as five years instead of three years.
The insurer said that their overall market share was at 12 percent and private sector market share was at 22.3 percent based on retail weighted received premium (RWRP) for FY17.
Batra said, "Our value of new business (VNB) margin expanded from 8 percent to 10.1 percent and the Embedded Value registered a growth of 16.1 percent which validates our value creation approach and is indicative of the strong performance on new business, expanding margins as well as sound risk management of the in-force book."
He added that their customer-centric philosophy also ensured good quality sales leading to higher persistency, with the 13th month persistency at 86 percent. It was 82.4 percent in FY16.
Persistency refers to the number of policies being renewed beyond the first year.
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