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ICICI Pru Life ED says protection biz growth led to jump in value of new business

The annualised premium equivalent of the life insurer rose by 17.6 percent in FY18 to Rs 7792 crore

April 24, 2018 / 08:12 PM IST
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Private life insurance company ICICI Prudential Life posted a 17.6 percent rise in its annualised premium equivalent for FY18. In an interaction with Moneycontrol, Sandeep Batra, Executive Director of the company discussed the financials and the strategy for FY19.

Edited Excerpts:

Q. What was the reason for the drop in profits? Was it due to the dip in the investment income?

A. The investment income was impacted due to a pass-through on account of a change in the mark-to-market on the unit-linked book. There has been no impact on the profit and loss (P&L) because of that.

The dip in the profit was due to the higher new business strain.


Q. In the last fiscal you had said that protection is a big opportunity. Will that continue this year too?

A. There was a 71 percent growth in the annualised premium equivalent (APE) of protection business resulting in the value of new business (VNB) growing by 93 percent to Rs 1,286 crore in FY18. Savings and protection are two distinct opportunities and we remain focused on them. However, the protection segment could grow at a faster pace given the under-penetration.

Q. Persistency has improved across all segments. Has that been a key focus area?

A. We have continued to make improvements in the persistency metrics. The 13th month persistency improved to 86.9 percent in FY18 (from 84.7 percent a year ago) and this excludes single premium and group policies. We are focused on improving persistency on a consumer point of view as well from a shareholder’s perspective, which is why it has improved across the 49th and 61st month as well.

Q. On the distribution front, what are the expansion plans for FY19?

A. We have an equal focus on the bancassurance as well as the agency channels. Whenever ICICI Bank or Standard Chartered Bank, our bancassurance partners, add new branches we are able to sell our products through them. However, our agents who are equipped with tablets are mini-branches by themselves The agency business has seen a 28 percent growth.

But, we are always in the lookout for tie-ups with non-banking financial companies (NBFCs) and small finance banks.

Q. ICICI PruLife was chosen to take over policyholder assets of Sahara Life by IRDAI, however Securities Appellate Tribunal had set aside the order. Do you still remain interested in the transaction?

A. That is something which the tribunal has asked Insurance Regulatory and Development of Authority of India (IRDAI) to examine. We will wait for their decision on this matter.

Q. Will you be open for any inorganic growth opportunities in FY19?

A. We are largely focused on growing business organically, but if something comes up that help us in increasing distribution and in shareholder value accretive, we will look at it at that point of time. There is nothing on the table right now.
M Saraswathy
first published: Apr 24, 2018 08:12 pm

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