ICICI Prudential's profit in March quarter down y-o-y by 26%

24 Apr 2024 , 10:51 AM

ICICI Prudential Life, a leading insurer, reported on Tuesday a 26% decline in consolidated net profit to ₹174 Crore for the March 2024 quarter. In the same quarter last year, it reported profit of ₹235 Crore.

Net premium income increased 17% during the reporting period to ₹14,788 Crore.

The company’s board also recommended a final dividend of ₹0.6 per equity share with a face value of ₹10 to shareholders.

The final dividend will be paid to qualified shareholders within 30 days of the declaration at the upcoming Annual General Meeting.

The company also saw a decreased new business margin, which was hampered by a prolonged decline in demand for high-value policies and a movement in consumer preferences towards low-margin goods.

Value for new business (VNB), or expected profit from new policies, declined 19% to ₹2,227 Crore in the fiscal year ended March 31, reducing the VNB margin to 24.6% from 32% the previous year.

Amidst a robust local equities market, life insurers have experienced an increase in their proportion of low-margin unit-linked insurance plans (ULIPs).

The company stated that the drop in VNB margin is mostly due to a shift in the underlying product mix towards unit-linked business.

Analysts believe that prolonged low demand for high-value plans following tax implementation modifications is weighing hard on their VNB margins.

The linked segment contributed 43.2% of the total product mix by annualised premium equivalent (APE) for the year.

APE, a significant metric for insurers, is a sales indicator that calculates the annualised total value of all single and recurring premium plans. The company’s APE sales increased by 4.7% during the year.

At around 10.40 AM, ICICI Prudential Life was trading 3.12% lower at ₹575.35, against the previous close of ₹593.85 on NSE. The counter touched an intraday high and low of ₹582.35 and ₹556.75, respectively.

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