ICICIPRULI - ICICI Prudential Life Insurance Company Limited Share Price

In the earnings call for the quarter ended June 30, 2025, management provided a cautious outlook, highlighting challenges in the current economic environment. The life insurance industry experienced slower growth, achieving only 5% year-on-year growth in retail weighted received premium (RWRP) compared to the previous year's impressive 20% growth. In this context, ICICI Prudential Life Insurance Company reported mixed performance metrics:

• The Annualized Premium Equivalent (APE) declined by 5% year-on-year to Rs.18.64 billion, while retail APE dropped 9.2% to Rs.15.12 billion.
• Retail new business sum assured grew 36.3% year-on-year, driven by a strong performance in the protection segment.
• Total premium noted an 8.1% increase year-on-year, amounting to Rs.89.54 billion.

Management highlighted the transition in customer preferences toward guaranteed products, shifting away from market-linked offerings in response to market volatility. The non-linked segment saw a 20.8% year-on-year growth. The claim settlement ratio remains strong at 99.6%, with an average turnaround time of 1.1 days.

Forward-looking points include a commitment to optimizing costs, where the cost-to-premium ratio improved by 280 basis points to 21.2%. The value of new business (VNB) for the quarter stood at Rs.4.57 billion with a margin of 24.5%, a notable increase from 22.8% in the previous fiscal year.

Management pointed to an improving product mix, emphasizing a shift towards higher-margin non-linked and protection products. Furthermore, they are focused on growth strategies while managing costs effectively to sustain the improvements in VNB margins moving forward. Overall, they are optimistic about returning to growth, particularly as external market conditions stabilize.

Q1-FY2026 Earnings Call - Key Questions and Answers

1. Question: "What explains the sharp decline in the agency business?" Answer: "The agency business grew over 70% last year, supported by market buoyancy. This year, shifts toward guaranteed products and changes in demand environments impacted the agency's performance. We're focused on licensing new advisors and adapting to market changes, but the demand shift has been transitionary."

2. Question: "Can you quantify the impact of the MFI channel's slowdown?" Answer: "The MFI credit life product is heavily impacted due to challenges in loan disbursements. This segment's recovery is contingent on the MFI sector improving, which we expect in the coming quarters, but currently, it remains an add-on to our portfolio."

3. Question: "How has persistency trended with the new tax regulation changes?" Answer: "Persistency on the 13-month bucket has decreased, stemming from heightened levels last year due to tax regulation changes. We're observing normalizing trends but continue working on cohorts facing challenges. The metric's fluctuation is expected as we move forward."

4. Question: "What is the expected growth trajectory for the next quarters in light of current product trends?" Answer: "Although ULIP demand remains soft, the market's overall resilience gives us faith that demand will recover. Our growth will be supported by increased participation across our varied product mix and distribution methodologies, allowing us to navigate market changes effectively."