ICICI Pru all set to double its new business value to ₹2,560 crore in FY23
PremiumICICI Prudential Life Insurance is required to grow only at the rate of 22.5% to meet the target as it has already grown much in the first quarter.
Private insurer ICICI Prudential Life on Sunday exuded confidence in meeting its target of doubling the value of new business to ₹2,560 crore this fiscal year from FY19 levels. It had set the target in the beginning of FY19 when the Value of its New Business (VNB) was ₹1,328 crore, according to news agency PTI.
VNB means the future profit of a life policy written at the present time. Higher the VNB margin the better will be the profitability of a company and this is calculated by dividing the VNB by annualised premium equivalent or regular premium plus 10 per cent of the single premium.
According to the management, the company is required to grow only at the rate of 22.5% to meet the target as it has already grown much in the first quarter.
NS Kannan, managing director and chief executive of ICICI Prudential Life Insurance said that the company’s 4Ps strategy that includes focus on premium growth, products especially on the protection side, improving persistency, and enhancing productivity, are performing as planned. The strategy had begun in FY19.
He said that company’s VNB has already grown by a shade less than 32% in Q1. “The strong VNB growth at the rate of 31.6% was carried out by a robust 24.7% growth in APE. These numbers proves the success of our 4P strategy," Kannan explained.
Further, he said that the company’s growth in the first quarter was exceptionally well because of rapid decrease in covid-19 cases claims that fell to a trickle of ₹16 crore from almost ₹500 crore almost an year ago, is leaving it bleeding ₹186 crore. Another reason was the improving persistency ration that jumped to 85%, he added.
The ICIC Prudential Life Insurance official explained that the persistency ration of the company improved in Q1 across all cohorts and the key 13th month ratio was 85.5%.
He said that the Q1 also reflected that the company is becoming the largest among the peers in terms of new business sum assured at ₹2.21 lakh crore with a market share of 15.8 per cent in the reporting quarter, up from 14.7 per cent in the year-ago period.
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(With PTI inputs)
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