Leading insurer ICICI Prudential Life on Tuesday reported a 26% drop in its consolidated net profit to Rs 174 crore for the quarter ended March 2024. The same stood at Rs 235 crore in the year-ago quarter.
Net premium income for the reporting period jumped 17% to Rs 14,788 crore.
The company\’s board has also recommended a final dividend of Rs 0.6 per equity share of face value of Rs 10 each, to the shareholders.
The final dividend will be paid to eligible shareholders within 30 days from the declaration at the ensuing Annual General Meeting (AGM).
The company also saw a lower new business margin, hurt by a persistent decline in demand for high-value policies and as customer preferences shifted towards low-margin products.
Value for new business (VNB), the expected profit from new policies, fell 19% to Rs 2,227 crore for the year ended March 31, dragging the VNB margin to 24.6% from 32% a year earlier.
Life insurers have seen a rising share of low-margin unit-linked insurance plans (ULIPs) amid a strong domestic equity market.
The decline in VNB margin is primarily on account of the shift in the underlying product mix towards unit-linked business, the company said.
Analysts believe continued weak demand for high-value policies post-tax implementation changes is also weighing heavily on their VNB margins.
The linked segment contributed 43.2% to the overall product mix by annualised premium equivalent (APE) for the year.
APE, a key metric for insurers, is a gauge of sales that gives the annualised total value of all single premium and recurring premium policies. The company\’s APE sales grew 4.7% for the year.
Ahead of the results, ICICI Pru Life shares closed 3.2% higher at Rs 597.85 on NSE.
