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Informist, Tuesday, Jan. 21, 2025

 

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--ICICI Pru Life: Focused on protection, annuity segment growth
--CONTEXT: Comments by ICICI Pru Life's mgmt in a post-earnings analyst call 
--ICICI Pru Life:Group fund segment highly profitable, happy to take up more 
--ICICI Pru Life: Focus is not on margin, but absolute value of new business 
--ICICI Pru Life: Customers valuing insurance pdts with liquidity benefits 
--ICICI Pru Life:Happy with overall focus on protection, sum assured segments 
--ICICI Pru Life: Always focused on curbing mis-selling, will work on it 
--ICICI Pru Life: Change in commission structure won't impact policy pricing 
--ICICI Pru Life: Upward trend in value in new business growth to continue

 

By Ashna Mariam George and Priyasmita Dutta 

 

MUMBAI – As part of its strategy to expand operations, ICICI Prudential Life Insurance Co. Ltd.'s senior management Tuesday said the insurer is ready to expand its group funds segment in the near term. "We're looking to grow absolute VNB (value of new business) and to that extent, group funds bring profits on the table, we're happy to take that," the management said in a post-earnings analyst call.

 

The annualised premium equivalent for the company's group funds segment surged 348.3% on year to INR 2.69 billion in Oct-Dec. For the nine months ended December, it grew 102.5% on year. "Contribution from group fund business increased from 3.7% last year to 6% in nine months in FY25," the management said. 

 

The management also said the company's focus is to increase the absolute value of new business and not the value of new business margin. "Our focus has always been on growing absolute VNB, and margins are primarily an outcome of the product mix," the management said. For the nine months ended December, the company's value of new business stood at INR 15.75 billion against INR 14.51 billion a year ago. Its value of new business margin was 22.8% for the nine months ended December, down from 26.7% a year ago.  

 

The management said it expects the upward trend in value in new business growth to continue.  

 

The company will also focus more on protection and annuity segments, the management said. "Protection and annuity are our focus segments, which together constitute approximately 42% of the new business premium, and we expect it to continue doing well." The annualised premium equivalent for the company's protection segment was INR 11.67 billion in the nine months ended December, up 6.9% on year. The annualised premium equivalent for the annuity segment was INR 6.16 billion, up 81.7% on year. 

 

The management also said it is comfortable with the company's overall focus on protection and sum assured segments. The annualised premium equivalent for the sum assured segment was INR 8.61 trillion for the nine months ended December, up 19.1% on year. 

 

Regarding mis-selling of insurance products by banks, the management said it always focused on curbing mis-selling. "Mis-selling is not something that we have ignored ever. We always want to focus on mis-selling and improving it all the time, irrespective of what the guidelines come eventually," the management said. Earlier in November, Finance Minister Nirmala Sitharaman had said that mis-selling of insurance products by banks had increased the cost of borrowing for customers. 

 

Focusing on its customer-centric products, the company said customers value liquidity benefits in long-term insurance products, and that the company offers liquidity feature in certain products.

 

The management also said the change in commission structure will not impact policy pricing. The Insurance Regulatory and Development Authority of India revised surrender value norms in June 2024 to ensure better payouts for policyholders who exit their policies early, which has led to a decrease in the first-year commission for agents. 

 

The insurer released its financial result for the quarter ended December post market hours Tuesday. ICICI Prudential Life Insurance Co. reported a 43% year-on-year increase in its net profit to INR 3.26 billion. Shares of the company closed 0.9% lower at INR 635.55 on the National Stock Exchange Tuesday.  End

 

Edited by Deepshikha Bhardwaj

 

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