MOSL: ICICI PRUDENTIAL LIFE INSURANCE (Buy)-Modest quarter, premium growth remains elusive
ICICI Prudential Life Insurance: Modest quarter, premium growth remains elusive
(IPRU IN, Mkt Cap USD6.9b, CMP INR344, TP INR430, 25% Upside, Buy)
- IPRU Life reported 3QFY19 PAT of INR2.9b (our estimate: INR3.2b). Gross premium growth was restricted to 10% YoY (+15% for 9MFY19) due to a 15% YoY decline in first-year premium.
- Total APE declined 4.2% YoY in 9MFY19 (-2% YoY in 3QFY19). Savings APE declined ~9% YoY to INR48.8b, while protection APE grew strongly by 100% YoY to INR4.6b, mainly led by group protection. Share of protection in total new business APE improved further to 8.6% (5.7% for 12MFY18, 7.9% in 1HFY18), while that of ULIPs stood at 80.9%.
- NBM shrank to 17% in 9MFY19 from 17.5% in 1HFY19, as management revised its cost assumption upward due to subdued growth in APE. 13th month persistency declined 140bp YoY to 84.1%, while all other segments exhibited an improvement. Decline in 13th month persistency was largely seen in higher-ticket-size segment, but the company re-iterated that retail-linked surrender reduced by 30% YoY.
- Total operating expenses grew ~21% YoY for 9MFY19 on account of higher advertisement cost and investments made in the protection business. Cost to weighted received premium, thus, increased to 15.3% in 9MFY19 from 13.5% in FY18. The share of agency/direct channel in the distribution mix dropped to 21.5%/11.6% from 26.3%/14.5% in 9MFY18.
- Other highlights: (i) Share of banca in the distribution mix increased 439bp to 56.5% as on 9MFY19. (ii) Total AUM grew 8% YoY to INR1.5t, with retail AUM comprising 89.3%. (iii) Solvency ratio stood at 224%, well above the regulatory requirement.
ICICI Prudential Life Insurance Company Limited is a life insurance company, which is a joint venture between ICICI Bank Limited and Prudential Corporation Holdings Limited. The Company provides life insurance, pensions and health insurance to individuals and groups. It conducts business in participating, non-participating and unit linked lines of businesses. Its segments include Par Life, Par Pension, Non Par, Annuity Non Par, Health, Linked Life, Linked Pension, Linked Health and Linked Group. It offers term plans, such as ICICI Pru iProtect Smart; unit linked insurance plans (ULIPs), such as ICICI Pru Wealth Builder II and ICICI Pru Elite Life II; child education insurance plans, such as ICICI Prudential SmartKid with Smart Life; retirement plans, such as ICICI Pru Easy Retirement; traditional savings/money back plans, such as ICICI Pru Cash Advantage and ICICI Pru Savings Suraksha, and Health insurance. It offers products on retail, mortgage and group platforms.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.