Icici Prudential Life Insurance Co. Ltd. · NSE:ICICIPRULI

Icici Prudential Life Insurance — H1 FY2017 Earnings Presentation

33 slides from Icici Prudential Life Insurance's earnings presentation, Oct 25, 2016

  1. Slide 1: H1-2017 performance review

    H1-2017 performance review October 25, 2016

  2. Slide 2: Agenda

    Agenda Opportunity Industry overview Company strategy and performance 2

  3. Slide 3: Agenda

    Agenda Opportunity Industry overview Company strategy and performance 3

  4. Slide 4: Favourable demography to drive macro growth

    Favourable demography to drive macro growth High Share of Working Population2 Large and Growing Population Base1  Indian economy 2015 Population (mn) 1311 1376 Population of age 25-60 years (in mn) poised to head 739 639 691 towards sustained 585 growth fuelled by favourable 208 258 322 demographic

  5. Slide 5: Share of Insurance in Savings Expected to Rise

    Share of Insurance in Savings Expected to Rise Share of insurance in household savings 60 Household Savings1 60% Distribution of financial assets1 48% 45% 41% 40% 21.1% 40 37% 40% 17.0% 15.4% 19.6% 33% Rs trillion 31% 26.2% 18.3% 14.4% 20 8.63 9.61 10.65 20% 6.43 7.34 7.75 2.47 14.23 15.00 14.98 14.

  6. Slide 6: Protection opportunity

    Protection opportunity Sum assured as % of GDP1 400% 300% 270% 260% 226% 200% 166% 149% 106% 96% 100% 60% 0% US Japan Singapore Korea Malaysia Germany Thailand India  Sum assured as % of GDP low compared to other countries  Protection gap for India approximately US $ 8.5 trillion2 1. Source: McKin

  7. Slide 7: Agenda

    Agenda Opportunity Industry overview Company strategy and performance 7

  8. Slide 8: Evolution of life insurance industry in India

    Evolution of life insurance industry in India FY2002 FY2010 FY2016 New business premium1 116 21.5% 550 -3.6% 441 (Rs bn) Total premium (Rs bn) 501 23.2% 2,655 5.5% 3,667 Penetration (as a % to 2.1% 4.1% 2.8% 2.7% GDP) Assets under 2,304 24.0% 12,899 11.9% 25,294 management (Rs bn) In-force sum assur

  9. Slide 9: New business

    New business1 Growth FY2013 FY2014 FY2015 FY2016 H1FY2017 Private 1.9% -3.4% 15.9% 13.6% 20.0% LIC -4.1% -3.4% -26.3% 2.9% 15.7% Industry -1.9% -3.4% -10.3% 8.1% 17.9% 400 60% 49.0% 51.5% 51.1% 50% 300 38.0% 36.5% 38.0% 40% Rs bn 200 30% 20% 100 10% 0 0% FY2012 FY2013 FY2014 FY2015 FY2016 H1FY2017 L

  10. Slide 10: Channel mix

    Channel mix1 Industry Private players 6% 6% 8% 8% 8% 17% 16% 17% 16% 18% 16% 16% 21% 24% 20% 43% 44% 47% 52% 47% 78% 78% 71% 72% 68% 40% 40% 36% 34% 32% FY2013 FY2014 FY2015 FY2016 Q1FY2017 FY2013 FY2014 FY2015 FY2016 Q1FY2017 Agency Bancassurance Others Agency Bancassurance Others  Givena well dev

  11. Slide 11: Product mix

    Product mix1 Industry Private players 10% 7% 12% 13% 35% 29% 38% 43% 90% 93% 88% 87% 65% 71% 62% 57% FY2013 FY2014 FY2015 FY2016 FY2013 FY2014 FY2015 FY2016 Traditional ULIP Traditional ULIP  Strong value proposition of ULIPs  Transparent and low charges  Lower discontinuance charges upto year 5

  12. Slide 12: Agenda

    Agenda Opportunity Industry overview Company strategy and performance 12

  13. Slide 13: Company Overview

    Company Overview Largest  Largest private sector life insurer in India by total premium Private Sector and AUM in FY2016 Life Insurer in  Recorded highest new business premium1 amongst private India players since FY20022  Largest bancassurance channel in India in terms of first year retail receiv

  14. Slide 14: Strategy: Market leadership + Profitable growth

    Strategy: Market leadership + Profitable growth  Continue to deliver superior customer value through better products, customer service and claims management Leverage market  Deliver superior fund performance opportunity  Focus on key local markets through customized regional strategy  Explore gr

  15. Slide 15: New Business

    New Business Rs bn FY2015 FY2016 Growth H1FY2016 H1FY2017 Growth RWRP1 45.96 49.68 8.1% 21.18 24.80 17.1% APE2 47.44 51.70 9.0% 22.34 26.13 17.0% Saving APE 46.68 50.31 7.8% 21.85 24.99 14.4% Protection APE 0.76 1.39 83.6% 0.49 1.14 132.7% 1. Retail weighted received premium 2. Annualized premium eq

  16. Slide 16: Premium summary

    Premium summary 200 191.64 100 18.13 90.29 153.07 83.19 5.46 160 9.14 80 53.57 13.28 124.29 27.84 120 8.97 48.21 60 22.38 Rs bn Rs bn 34.32 80 40 119.95 56.99 95.71 47.53 40 81.00 20 0 0 FY2014 FY2015 FY2016 H1FY2016 H1FY2017 Retail renewal premium Retail new business premium Group premium 16 Compon

  17. Slide 17: Market share

    Market share1 30% 30% 25% 24.8% 24.2% 23.0% 25% 21.9% 20% 18.9% 20% 15% 15% 12.4% 12.4% 11.3% 11.3% 10% 10% 7.2% 5% 5% 0% 0% FY2014 FY2015 FY2016 H1FY2016 H1FY2017 Within total industry Within private sector 1. Retail weighted received premium (RWRP) basis 17 Source: IRDAI, Life insurance council

  18. Slide 18: Consistent leadership in private sector

    Consistent leadership in private sector1 Market Share FY2012 FY2013 FY2014 FY2015 FY2016 H1FY2017 LIC 63.5% 62.0% 62.0% 51.0% 48.5% 48.9% ICICI Prudential 5.9% 7.0% 7.2% 11.3% 11.3% 12.4% SBI Life 4.4% 5.1% 6.2% 7.7% 9.7% 10.3% HDFC Life 5.7% 6.7% 5.2% 7.3% 7.6% 6.4% Max Life 3.1% 3.2% 3.9% 4.8% 4.8

  19. Slide 19: Product mix

    Product mix1 Product mix1 FY2014 FY2015 FY2016 H1FY2016 H1FY2017 ULIP 64.1% 83.1% 80.8% 82.5% 80.1% Participating 18.2% 13.2% 14.1% 12.0% 12.0% Protection2 2.2% 1.6% 2.7% 2.2% 4.4% Non-Participating 13.3% 0.6% 0.4% 0.5% 1.9% Group3 2.2% 1.5% 2.0% 2.8% 1.5% 60 30 1.25 0.90 50 1.02 1.39 25 1.14 0.76 7

  20. Slide 20: New business sum assured

    New business sum assured 2,000 2,000 1,546.25 1,500 1,485.49 1,500 1,195.35 673.51 Rs bn 979.40 Rs bn 1,000 928.65 1,000 666.67 743.56 506.09 500 356.17 500 811.98 528.68 566.85 422.57 387.38 0 0 FY2014 FY2015 FY2016 H1FY2016 H1FY2017 Group Retail Group Retail 20

  21. Slide 21: Channel mix

    Channel mix Channel Mix1 FY2014 FY2015 FY2016 H1FY2016 H1FY2017 Bancassurance 53.2% 58.4% 57.3% 60.8% 56.1% Agency 28.2% 24.4% 23.8% 20.3% 23.4% Direct 6.3% 8.6% 9.8% 9.1% 12.4% Corporate agents and brokers 9.9% 7.0% 7.0% 6.8% 6.1% Group 2.5% 1.6% 2.1% 2.9% 2.1% 60 30 50 3.61 25 1.61 3.32 5.04 3.23

  22. Slide 22: Quality Parameters

    Quality Parameters FY2015 FY2016 H1FY2016 H1FY2017 13th month persistency1 79.0% 82.4% 81.0% 82.1%2 49th month persistency1 54.4% 62.2% 77.8%3 61.1%2 Cost (Rs bn) 22.58 25.45 11.99 14.24 Cost/ TWRP4 15.4% 14.5% 16.7% 17.1% Assets under 1,001.83 1,039.39 991.27 1,128.27 management (Rs bn) 1. As per I

  23. Slide 23: Persistency

    Persistency1 Month FY2014 FY2015 FY2016 H1FY2016 5MFY2017 13th month 71.5% 79.0% 82.4% 81.0% 82.1% 25th month 68.4% 65.9% 71.2% 68.0% 72.5% 37th month 57.3% 64.3% 61.6% 63.5% 62.9% 49th month 20.3% 54.4% 62.2% 77.8%2 61.1%2 61st month 12.7% 14.5% 46.0% 15.6% 65.6% 1. As per IRDA circular dated Janua

  24. Slide 24: Leveraging technology across value chain

    Leveraging technology across value chain Pre sales Fulfilment Post sales  Structured sales  Intuitive, easy to use  Enable anytime, approach and need app form with data anywhere servicing analysis pre population  View and update  Product literature in  eKYC – no doc policy details and 12 langu

  25. Slide 25: Cost efficiency

    Cost efficiency Rs bn FY2014 FY2015 FY2016 H1FY2016 H1FY2017 Expense ratio (excl. commission)1 13.6% 11.7% 11.0% 13.2% 13.4% Commission ratio2 5.2% 3.8% 3.5% 3.5% 3.7% Cost/TWRP3 18.8% 15.4% 14.5% 16.7% 17.1% Cost / Average AUM4 2.9% 2.5% 2.5% 2.4% 2.6% 30 30 25.45 22.55 22.58 6.20 20 6.27 5.53 20 1

  26. Slide 26: Superior fund performance across cycles

    Superior fund performance across cycles* 14.6% 11.8% 11.6% 12.2% 12.1% 11.5% 11.2% 11.1% 10.8% 10.2% 9.7% 9.7% 7.7% 8.6% 8.7% 7.7% 1Y 5Y 1Y 5Y 1Y 5Y 1Y 5Y Benchmark Fund Maximiser Preserver Protector Balancer (Equity Fund) (Liquid fund) (Debt fund) (Balanced fund) 94.4% of debt investments in AAA ra

  27. Slide 27: Assets under management

    Assets under management Linked Mix (%) Equity Mix (%) 74.8 74.6 72.4 73.8 72.6 47.4 48.0 46.3 46.5 45.1 Rs bn Rs bn 1,128.27 1,200 1,128.27 1,200 1,039.39 1,039.39 991.27 1,001.83 1,001.83 1,000 308.82 1,000 991.27 805.97 286.44 260. 805.97 508. 254.06 800 21 800 98 480.86 481.04 460.53 202.86 600 6

  28. Slide 28: Profitability

    Profitability Amount in Rs bn FY2015 FY2016 H1FY2017 Profit after tax (PAT) 16.34 16.50 8.24 Value of new business1 2.70 4.12 2.44 VNB Margin1 5.7% 8.0% 9.4% Indian Embedded Value - 139.39 148.38 (IEV) 1. IEV basis on actual cost 28

  29. Slide 29: Profitable growth

    Profitable growth Solvency Ratio 372 337 320 328 306 (%) Profit after tax (Rs bn) 18 18 16.34 16.50 15.67 15 15 12 12 Rs bn Rs bn 9 8.12 8.24 9 6 6 3 3 0 0 FY2014 FY2015 FY2016 H1FY2016 H1FY2017  Sustained and strong profitability  Well positioned to capitalize on growth opportunity 29

  30. Slide 30: Value of New Business

    Value of New Business1 Rs billion FY2015 FY2016 H1FY2017 APE 47.44 51.70 26.13 Savings APE 46.68 50.31 24.99 Protection APE 0.76 1.39 1.14 Value of New Business (VNB) 2.701 4.121 2.442 VNB Margin 5.7% 8.0% 9.4% Indian Embedded Value - 139.39 148.38  Growth in Protection APE of 132.7%  Improvement

  31. Slide 31: Summary

    Summary India: High growth  Low penetration1 vs mature economies and even lower density 1 potential  One of the fastest growing large economy in the world with strong growth drivers Consistent  #1 in India on RWRP 2 basis for every year since FY2002 2 Leadership Across Cycles  Significant market

  32. Slide 32: Safe harbor

    Safe harbor Except for the historical information contained herein, statements in this release which contain words or phrases such as 'will', 'would', ‘indicating’, ‘expected to’ etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forwar

  33. Slide 33: Thank you

    33 Thank you @ICICI PRUDENTIAL? pLirFe «NS UR AN CR

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