ICICI Prudential Life Insurance Reports 26% Decline in Q4 Profit

ICICI Prudential Life Insurance, the fourth largest life insurer in India, reported a 26% decline in profit after tax to ₹174 crore for the fourth quarter of fiscal year 2023-24. The company's new business premium (NBP) income grew by 16.3% to ₹6,553 crore, while total premium including renewals rose by 16.6% to ₹15,150 crore during the quarter. "The company's industry-leading claim settlement ratio of 99.2% in FY2024 with an average turnaround time of 1.3 days for non-investigated claims," highlighted Anup Bagchi, MD & CEO of ICICI Prudential.

However, the value of new business (VNB) margin declined by 26.4% to 7.76% due to a shift in product mix, decline in group term business, and higher expense ratio. The company's expenses of management increased by 10% to ₹2,550 crore. For the full year FY 2024, ICICI Prudential's profit after tax grew by 5.1% to ₹852 crore, and the total premium was ₹43,236 crore, up 8.3%. The insurer's VNB for FY 2024 was ₹2,227 crore, with a VNB margin of 24.6%.

The company's embedded value grew by 18.8% to ₹42,337 crore, and its assets under management (AUM) increased by 17.1% to ₹294,140 crore. ICICI Prudential has recommended a final dividend of ₹0.60 per equity share, subject to shareholder approval. Jefferies has maintained a buy call on ICICI Prudential Life Insurance with a raised target of ₹680 from ₹590.

Why this matters: The decline in ICICI Prudential's quarterly profit and VNB margin reflects the challenges faced by life insurers in India due to changing customer preferences and market dynamics. The company's performance is a key indicator of the overall health of the life insurance sector in the country.

Despite the decline in quarterly profit, ICICI Prudential's full-year results showed growth in profit after tax and total premium. The company's strong claim settlement ratio and increase in embedded value and AUM demonstrate its resilience and long-term growth potential. The final dividend recommendation and positive outlook from analysts further underscore the company's financial stability and future prospects in the Indian life insurance market.

Key Takeaways

• ICICI Prudential Life's Q4 FY23 net profit declined 26% to ₹174 crore.
• NBP grew 16.3% to ₹6,553 crore, total premium up 16.6% to ₹15,150 crore.
• VNB margin fell 26.4% to 7.76% due to product mix shift, higher expenses.
• FY24 profit up 5.1% to ₹852 crore, total premium grew 8.3% to ₹43,236 crore.
• Embedded value rose 18.8% to ₹42,337 crore, AUM up 17.1% to ₹294,140 crore.