MUMBAI: Second largest private sector life insurer ICICI Prudential Life has reported a 34.2% on-year growth in net income at Rs 302 crore for the June quarter driven by lower new business strains and reduction in overall expenses.
The new business received premium rose 6.4% to Rs 4,012 crore, while total premium collections increased 8.1% to Rs 8,954 crore.
The life insurer saw a marginal decline in the value of new business (VNB) to Rs 457 crore from Rs 472 crore in Q1. However, the VNB margin improved to 24.5% from 24%, the company said in a statement Tuesday.
Annualised premium equivalent also declined 5% to Rs 1,864 crore following a 9.5% drop in savings APE, the company said without offering reasons for the declines. But protection APE bucked the trend with a 15.2% rise to Rs 409 crore, as the company pushed retail protection which grew 24.1% to Rs 139 crore.
The new business received premium rose 6.4% to Rs 4,012 crore, while total premium collections increased 8.1% to Rs 8,954 crore, while renewal premium income grew 9.4% to Rs 4,942 crore, indicating improved policyholder retention.
The assets under management rose to Rs 3.24 trillion, up 5.1%$ from the previous year.
The cost-to-total premium ratio dropped to 21.2 from 24. Within the savings line of business, the metric improved to 14.1 from 16.8.
The solvency ratio strengthened to 212.3, well above the Irdai-mandated 150.
The company’s net worth also rose to Rs 12,553 crore from Rs 11,291 crore last year.
On the persistency front, 13th-month persistency (by premium) stood at 80.8%, down from 85.7%. However, longer-term persistency ratios showed improvement, 25th-month persistency increased to 82.5 from 79.5, and 49th-month persistency ratio rose to 69.8 from 68.2.
Despite reasonably good showing by the markets in May and June its investment income declined, primarily due to reduced unit-linked portfolio returns. While total investment income fell from Rs 17,521 crore to Rs 16,892 crore, those from unit-linked portfolios declined to Rs 14,095 crore from Rs 14,818 crore.
The drop was partially offset by an increase in interest income on non-unit-linked investments, which rose to Rs 2,797 crore from Rs 2,702 crore.
Total expenses, including commissions, declined 3.9% to Rs 2,068 crore. Operating expenses dropped 10.1%, aided by reduced advertising and sales-related spending.