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Informist, Tuesday, Oct. 22, 2024

--ICICI Prudential Life: Protection, annuity are our focus segments 

--CONTEXT: ICICI Prudential Life mgmt comments in post-earnings analyst call 

--ICICI Pru Life: Seeing pricing pressure in group term business segment 

--ICICI Pru Life: Market buoyancy has led to rise in unit-linked products 

--ICICI Pru Life: Added over 100,000 agents in the past 2.5 years 

--ICICI Pru Life: Creating micro-market strategy to aid growth further 

--ICICI Pru: With pick up in growth, renewable premiums will rise in few yrs 

By Kshipra Petkar and Vaishali Tyagi

MUMBAI – ICICI Prudential Life Insurance Co. Ltd. is focussed on protection and annuity segments amid market shifts to aid further growth in business, the management said in its post-earnings call. "Our focus has been on protection and annuity side of the business, they are growing quite significantly," the management said.

Within the overall product mix, annuity products rose 73% on year to INR 2.18 billion during the September quarter, and protection products rose 7.9% on year to INR 4.21 billion, according to the life insurer's investor presentation. The total annualised premium equivalent growth was 21.4% on year at INR 25.03 billion in the reporting quarter.

While ICICI Prudential Life continues to expand its footprint, the company acknowledged certain challenges, particularly in the group term insurance business. The company said they are seeing pricing pressure in this segment which led to some degrowth in business.

"Group term is where we have seen pricing pressure, we have started growing now on group protection and group term products. However, on premium because of pricing pressure, this segment has delivered a little bit of a degrowth for us," the management said. "So that's how group protection combined between credit life and group term is showing a relatively muted growth."

The company's management is positive on resurgence in demand for unit-linked insurance plans. ICICI Prudential Life said this demand for unit-linked insurance plans comes due to the buoyancy in the financial markets, with investors showing renewed interest in such products as market conditions improve.

"Based on where the customer opportunity is, and you've seen this in this particular half year and actually over the last nine months as well, the market buoyancy has led to an increase in the unit link product, we're quite happy to partake in the opportunity and quite happy to serve our products to our customers," the management said.

The agency channels annualised premium equivalent increased by 43.9% on year to INR 7.80 billion in Jul-Sept and the direct channels were up 33.3% on year at 3.96 billion. "Together, agency and direct business contribute 45.9% to overall annualised premium equivalent and 53.6% to retail APE in H1 (Apr-Sept) FY25. We will continue to invest in our proprietary channels to drive business growth further," the management said.

Bank Insurance Business APE grew 27.1% year on year and contributed 29.4% to annualised premium equivalent mix. Partnership distribution and group business contributed 9.9% and 13.7%, respectively, to overall annualised premium equivalent. "We continue to build capacity and have added more than 29,000 agents during Apr-Sept, spread across geography," they said. 

ICICI Prudential Life said it has added over 100,000 agents over the past two-and-a-half years and sees this as a crucial step toward reaching more customers and enhancing distribution capabilities across the country.

The management said that the company is also focussed on creating a strategy to target customers at micro-market level to boost growth. "The effort is to go and understand unique local markets, which we call them micro markets, and create strategies which are unique, and hence, we believe that with heterogeneity of micro markets that you have in India, there will always be an opportunity area which will play out and deliver growth for us," the management said.

The company board has approved raising up to INR 14 billion through non-convertible debentures on a private placement basis in one or more tranches, the life insurer had informed exchanges on Friday. "The additional capital raise will further augment the solvency position of the companies and aid to ongoing business growth," the management said. "If we raise the INR 14 billion, that should increase our solvency by roughly 20%."

The bank announced its earnings after market hours on Tuesday. On the National Stock Exchange, shares of ICICI Prudential Life ended 2.5% lower at INR 731.05.  End

Edited by Ashish Shirke

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