Performance for the half year ended September 30, 2017
VNB grows by 70.9%
APE increases by 36.8%
Highlights
- Value of New Business (VNB*) increased by 70.9% to `17 billion in H1-FY2018 from `2.44 billion in H1-FY2017
- New Business Annualised Premium Equivalent (APE*) increased by 36.8% to `74 billion in H1-FY2018 from `26.13 billion in H1-FY2017
- Market share stood at 13.7% on RWRP basis for H1-FY2018, retaining leadership amongst private players.
- 13th month Persistency stood at 87.0%
- Interim dividend of `40 per equity share approved by the Board
| ` billion | | | FY2017 | | | H1-FY2017 | | | H1-FY2018 | | | Growth YoY | |
| | | | | | | | | |
| Annualized Premium Equivalent | 66.25 | 26.13 | 35.74 | 36.8% |
| (APE) * | | |
| | | | | | | | | | | | | |
| | | | | | |
| · | Savings | 63.64 | 24.99 | 34.23 | 37.0% |
| | | | | | | | |
| · | Protection | 2.60 | 1.14 | | 1.50 | | 31.6% |
| | | | | | |
| Value of new business (VNB) 1 | 6.66 | 2.44 | | 4.17 | | 70.9% |
| | | | | | |
| VNB Margin (%)1 | 10.1% | 9.4% | 11.7% | | | |
| | | | |
| RWRP * | 64.08 | 24.80 | 34.42 | 38.8% |
| | | | | | |
| Market share based on RWRP* | 12.0% | 12.4% | 13.7% | | | |
| | | | | | |
| 13th month persistency* | 85.7% | 82.3% | 87.0%2 | | | |
| | | | | | |
| 49th month persistency* | 59.3% | 61.1% | 60.6%2 | | | |
| | | | | | |
| Cost | | | 31.60 | 14.25 | 15.03 | 5.5% |
| | | | | | |
| Cost Ratio (Cost/TWRP)* | 15.1% | 17.1% | 14.1% | | | |
| | | | |
| Embedded Value3 | 161.84 | 148.38 | 172.10 | 16.0% |
| | | | |
| Assets under management | 1,229.19 | 1,128.27 | 1,305.91 | 15.7% |
| | | | | | | | | | | | | | | |
- VNB and VNB margin based on actual cost for full year and management forecast of cost for half year
- For policies issued during September to August period of relevant year measured as on September 30, 2017
- As per Indian Embedded Value (IEV) method
* Refer the section on definitions, abbreviations and explanatory notes
The Board of Directors of ICICI Prudential Life Insurance Company Limited approved its audited financial results for the quarter ended September 30, 2017, following its meeting on Tuesday, October 24, 2017 in Mumbai. The disclosure of financial results submitted to exchanges is annexed to this release.
New business growth and market share
- 8% year-on-year growth in Annual Premium Equivalent (APE);
- Savings APE grew by 37.0% on a y-o-y basis
- Protection APE registered a growth of 31.6% on a y-o-y basis
- For H1-FY2018, the market share stood at 13.7% on a RWRP basis retaining leadership amongst private players.
Profitability
- Value of New Business (VNB) increased by 70.9% to `17 billion in H1-FY2018 from `2.44 billion in H1-FY2017.
- VNB margin for H1-FY2018 was 11.7% as compared to 10.1% in FY2017.
Dividend
- Interim dividend of `40 per equity share (including the special dividend of `1.10 per equity share) for H1-FY2018.
Quality of business
- 13th month persistency improved to 87.0% for 5M-FY2018 from 82.3% for H1-FY2017.
Definitions, abbreviations and explanatory notes
- Annual Premium Equivalent (APE): APE is a measure of new business written by a life insurance company. It is computed as the sum of annualised first year premiums on regular premium policies, and ten percent of single premiums, written by the Company during any period from new retail and group customers.
- Value of New Business (VNB) and VNB margin: VNB is used to measure profitability of the new business written in a period. It is present value of all future profits to shareholders measured at the time of writing of the new business contract. Future profits are computed on the basis of long term assumptions which are reviewed annually. Also referred to as NBP (new business profit). VNB margin is computed as VNB for the period/APE for the period. It is similar to profit margin for any other business.
- Retail Weighted Received Premium (RWRP): RWRP is a new business measure very similar to APE for the retail (also referred to as individual) business with the only difference being that the regular premiums considered here are first year premiums actually received by the life insurer and not annualised. Secondly since it is a new business measure for retail business, it includes only premium received from retail customers. It is the sum of all retail first year premiums and ten percent of retail single premiums received in a period.
- Total Weighted Received Premium (TWRP): TWRP is a measure of total premiums from new and existing retail and group customers received in a period. It is sum of first year and renewal premiums on regular premium policies and ten percent of single premiums received from both retail and group customers by Company during the period.
- Cost Ratio: Cost ratio is a measure of the cost efficiency of a Company. Expenses are incurred by the Company on new business as well as renewal premiums. Cost ratio is computed as a ratio of all expenses incurred in a period comprising commission, operating expenses, provision for doubtful debts and bad debts written off to total weighted received premium (TWRP).
- Persistency: It is the most common parameter for quality of business representing the percentage of retail policies (where premiums are expected) that continue paying premiums. The method of computation of Persistency has been prescribed by IRDAI vide its circular dated January 23, 2014.
