Strong Performance in Market-Linked Insurance Drives Profit Growth
- ICICI Prudential Life Insurance reported a 9% increase in its first-quarter profit.
- The profit after tax for the quarter ending June 30 reached 2.25 billion rupees ($26.9 million), up from 2.07 billion rupees the previous year.
- Annualised Premium Equivalent (APE) sales grew by 34.4% year-over-year.
ICICI Prudential Life Insurance, backed by ICICI Bank, announced a substantial 9% increase in its profit for the first quarter, which ended on June 30. This growth was fueled by a robust demand for market-linked insurance products. The insurer’s profit after tax rose to 2.25 billion rupees ($26.9 million), compared to 2.07 billion rupees in the same quarter last year.
The company’s annualized premium equivalent (APE) sales, a crucial indicator of sales performance, surged by 34.4% from the previous year. APE measures the annualized total value of all single premium and recurring premium policies, offering a comprehensive view of sales activity.
Market analysts have noted that a shift towards low-margin market-linked insurance plans, buoyed by strong equity market performance and increasing payouts, has placed pressure on life insurers’ margins. During the June quarter, Indian equity benchmarks achieved record highs, driven by policy stability following the general election results and expectations of robust economic growth.
The value for new business (VNB), representing the anticipated profit from new policies, increased by 7.8% to 4.72 billion rupees in the June quarter. However, the VNB margin decreased to 24% from 30% a year earlier.
ICICI Prudential Life’s market-linked savings segment now constitutes just over half of its overall product mix, an increase from 38.8% a year ago. This shift highlights the growing preference for market-linked products among consumers, reflecting broader trends in the insurance industry.
