ICICI Prudential Life Insurance Q2FY22 Conference Call & Result Analysis

Q2FY22 Financial Highlights:

YoY, Net profit rose by 48% in Q2FY22 led by growth in premium and Investment Income

H1FY22 Operating Performance Review:

Product & Distribution Mix

Concall Highlights H1FY22:

Business Highlights:

• Drop in covid cases, significant pickup in vaccination helped the insurer to back on the recovery path.
• The company has adopted digital mode for sales & servicing. Also, started document pickup service for senior citizen.
• The company has won Claims and Customer Service Award and Innovation During Covid 19 Award held by FICCI 2021.
• Overall APE grew by 34.9% YoY to Rs.1980 Cr (up 39.7% YoY in 1HFY22). The company has seen strong growth on the back of a favourable base, as last year’s sales were affected due to covid-19.
• In Q2FY22, linked savings APE grew by 43.5% YoY (up 45.4% YoY in 1HFY22). Non-linked savings (excl. annuity) grew by 22.6% YoY to Rs.460 Cr (up 42% YoY in 1HFY22).
• Annuity has seen very strong traction with ICICI Bank channel doubling YoY in 1HFY22. In 1HFY22, annuity APE grew by 97.1% YoY to Rs.140 Cr. Annuity business contribute 20.1% in H1FY22 over 15.2% in H1FY21.
• Overall protection APE grew by 20.7% YoY to Rs.280 Cr in 2QFY22 (up 23.3% YoY in 1HFY22) was mostly led by group term, including credit protect.
• ICICI Pru Pension fund AUM grew by 74% to 9748 Cr in Sep 21 over Sept 20. Significant focus on driving synergy between ICICI Pru Life and ICICI Pru PFM. Contribution of 45% in new business premium by pension & annuity
• Investment in new partnerships and channels have also yielded results. During 1HFY22, the company added 53 new partnerships. Non ICICI Bank banca partners have delivered strong growth, accounting for 11-12% of the total banca share of 39%
• Lowest cost ratio of 17.8% in H1FY22 compare to peers. Solvency ratio stood at 199% in H1FY22 over 205.5% in H1FY21

Current Concern:

• Retail protection business continues to suffer due to supply side constraints and underwriting challenges, including prospective customers being reluctant to undertake physical medical examination. The new business growth is likely to remain muted in the near term. As a mitigating measure, the company is focusing on the group term business.
• The company believes that challenging protection segment will be an opportunity due to under penetration.
• The company expects the final outcome to be a combination of price increase and tightening of underwriting norms (based on emerging claims experience).
• Number of policies not growing in the industry as the activity drop drastically due to covid led to lesser number of customer got engaged. 42%-45% are protection policies contributed in the private sector companies due to drop in protection it got impacted.

Covid 19 Claims and Provision:

• Total claims on account of COVID-19 for H1-FY2022 was Rs. 1,879 Cr. The full-year Covid-19 claims for the same in FY21 were Rs.354 crore.
• The claim is still pending as on the account of delayed claim intimation received.
• Claims net of reinsurance for H1-FY2022 was Rs.862 Cr.
• Provision of Rs 412 Cr (Rs.332 Cr in March 21) held for future COVID-19 claims including Incurred but not reported