ICICI Prudential Life Insurance Company Ltd's Q3FY19 standalone net profit declines 34.36% yoy to Rs296.77cr : Misses Estimates

The company’s standalone net premium income stood at Rs7,482.95cr, up 10.12% yoy but down 1.56% qoq.

Jan 22, 2019 09:01 IST India Infoline Research Team

ICICI Prudential Life Insurance Company Ltd Q3FY19

Standalone Results Q3FY19: (Rs. in cr)

Q3FY19 YoY (%)
Net Premium Income 7,482.95 10.1
Net Profit (adjusted) 296.77 [34.4]

ICICI Prudential Life Insurance Company Ltd's gross written premium increased by ~10% yoy to Rs7,566.36cr in Q3FY19. The net premium income for Q3FY19 came in at Rs7,482.95cr, an increase by 10.1% yoy, in-line with estimates. Net commission expense remained flat at Rs367.14cr in Q3FY19. Benefits paid during Q3FY19 declined by 29% yoy to Rs3,324.52cr whereas change in actuarial liability resulted into additional provision of Rs3,866.26cr during Q3FY19. Net profit after tax for Q3FY19 stood at Rs296.77cr, a decline by 34.4% yoy. The solvency ratio of the company was at 224.3% as on December 31, 2018. The net profit missed the estimate of Rs385cr by 23%.

• ICICI Prudential Life’s retail weighted received premium (RWRP) declined by 10.8% yoy to Rs4,815cr in 9MFY19.
• The investment income under policyholder’s account declined by ~84% yoy to Rs1,048cr in Q3FY19.
• The profitability of new business written, as measured in the ‘Value of New Business’ (VNB), increased 18.6% to Rs910cr in 9MFY19 from Rs767cr in 9MFY18.
• Value of new business (VNB) margin increased from 13.7% in 9MFY18 to 17.0% in 9MFY19. However, the VNB margin has declined by ~112bps qoq as the management has lowered the income growth assumption for the financial year coupled with maintenance of the costs.
• The Annualized Premium Equivalent (APE) of new business written during 9MFY19 declined by 4.2% yoy.
• The protection APE increased significantly by ~100% to Rs461cr during 9MFY19.
• The cost to TWRP (total weighted received premium) increased to 15.4% in 9MFY19 as against 14.0% in 9MFY18, on account of higher new business strain during the period.
• The AUM (assets under management) of the company increased by 8.4% yoy to Rs1,49,981cr as on December 31, 2018.
• The 13th month persistency in 9MFY19 declined to 84.1% vs. 85.5% during 9MFY18. However, it witnessed an improvement across remaining cohorts from 25th month to 61st month.
• The company’s net worth stood at Rs6,815cr as at December 31, 2018. The solvency ratio was at 224.3% as against regulatory of 150%.
• The yield on investment (with unrealized gains) on policyholder’s fund was lower due to subdued equity markets. The investment yield across segment was:
o Non-linked par 7.7% in Q3FY19 vs 8.0% in Q3FY18
o Non-linked non-par 8.5% in Q3FY19 vs 8.2% in Q3FY18
o Linked non-par (0.3%) in Q3FY19 vs 26.1% in Q3FY18

Technical View:

ICICI Prudential Life Insurance Company Ltd is currently trading at Rs. 343.45, down by 8 points or 2.28% from its previous closing of Rs. 351.45 on the BSE.
The scrip opened at Rs. 354 and has touched a high and low of Rs. 354 and Rs. 341.50 respectively. So far 9,29,999 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.

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