ICICI Prudential Life Insurance to channelize on increasing absolute VNB, post downturn in FY24

During the conference call following the company’s earnings, Dhiren Salian, the Chief Financial Officer, stated that a change in the company’s “product mix, competitive pricing pressures, and increases in expenses” are the reasons behind the fall in VNB.

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According to ICICI Prudential Life Insurance, its future growth strategy would center on increasing its absolute Value of New Business (VNB). The business stated that VNB, or the expected profitability from new policies sold, decreased 19.45 percent to Rs 2,227 crore for FY24 from Rs 2,765 crore in FY23 in the Q4FY24 results, which were released on April 23. The VNB margin decreased as well, from 32% in FY23 to 24.6 percent in FY24.

During the conference call following the company’s earnings, Dhiren Salian, the Chief Financial Officer, stated that a change in the company’s “product mix, competitive pricing pressures, and increases in expenses” are the reasons behind the fall in VNB.

According to Sailan, the impact of the amended commission has been taken into account for the year and will not have a significant influence on unit cost moving forward.

Unit-linked portfolios are a low-margin product that investors are preferring due to the growth in stock market buoyancy.

A measure of revenues for insurance businesses, the insurer’s Annual Premium Equivalent (APE) rose 4.69 percent to Rs 9046 crore in FY2024.

The company’s net profit for the quarter that ended in March 2024 dropped 26% YoY to Rs 174 crore, according to Q4 data that were released after market hours.

A final dividend of Rs 0.6 per equity share with a face value of Rs 10 each was also issued by the board to the shareholders.

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