Icici Prudential Life Insurance Co. Ltd. · NSE:ICICIPRULI
Icici Prudential Life Insurance — Investor Presentation (October 2024)
74 slides from Icici Prudential Life Insurance's investor presentation, Oct 11, 2024
Slide 1: Exchange cover letter: Investor presentation September 2024
October 11, 2024 General Manager Vice President Listing Department Listing Department BSE Limited, National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, ‘Exchange Plaza’, Dalal Street, Bandra-Kurla Complex, Mumbai 400 001 Bandra (East), Mumbai 400 051 Dear Sir/Madam, Subject: Investor
Slide 2: Performance update
Performance update October 11, 2024
Slide 3: September 2024 update
September 2024 update
Slide 4: Premium growth
Premium growth Q1- August September H1- ` billion FY2024 July 2024 FY2025 2024 2024 FY2025 RWRP1 72.13 15.58 6.81 6.81 7.45 36.66 Y-o-Y growth 7.0% 46.8% 40.4% 29.5% 32.6% 39.2% APE2 90.46 19.63 8.25 7.97 8.81 44.67 Y-o-Y growth 4.7% 34.4% 24.1% 20.0% 20.2% 26.8% New business premium 180.81 37.69 17
Slide 5: Agenda
Agenda • Company strategy & performance • Opportunity & industry overview
Slide 6: Agenda
Agenda • Company strategy & performance • Opportunity & industry overview
Slide 7: Key strategic elements
Key strategic elements 4D framework enabling our 4P strategy 4P strategy Data Diversified analytics propositions Protection Customer centricity Premium VNB Customer continues Growth Growth Persistency to be at the core Depth in Digitalisation Productivity Partnerships Risk calibrated growth with foc
Slide 8: 4D framework
4D framework Data analytics Diversified propositions • Deeper understanding of customer • Offer suitable customer proposition lifestyle & income segments through appropriate distribution • Identify opportunities across diverse • Provide holistic solution across customer segments & geographies custom
Slide 9: Performance snapshot: Q1-FY2025
Performance snapshot: Q1-FY2025 VNB Premium Persistency 19.63 13th 89.7% (₹ billion) (₹ billion) 4.72 Month1 Total APE 15.1% NOP growth 49th 70.7% Protection Productivity Cost/TWRP: 24.0% 3.55 19.2% (₹ billion) Savings2 Margin APE 1 Regular & Limited pay persistency in accordance with IRDAI Master c
Slide 10: Customer focused & most partnerable Company
Customer focused & most partnerable Company Industry leading claim settlement ratio1 ~48% of savings policies issued on same of 99.2% for FY2024 day in Q1-FY2025 Extensive suite of products available for varied customer needs Customer Same day commission available for centric select distributors ~85
Slide 11: 4P strategic elements
4P strategic elements 4D framework enabling our 4P strategy 4P strategy Data Diversified analytics propositions Protection Customer centricity Premium VNB Customer continues Growth Growth Persistency to be at the core Depth in Digitalisation Productivity Partnerships Risk calibrated growth with focu
Slide 12: RWRP growth vs. industry
RWRP growth vs. industry RWRP Q2-FY2024 Q3-FY2024 Q4-FY2024 Q1-FY2025 (Y-o-Y growth) Overall industry 12.8% 5.9% 0.3% 19.7% Private industry 16.0% 9.4% 2.4% 23.8% ICICI Pru Life 4.1% 10.0% 11.5% 46.8% Outperformed private & overall industry in RWRP growth for the 3rd consecutive quarter RWRP: Retail
Slide 13: Premium growth (1/2)
• Build capacity & enhance efficiency in Premium growth (1/2) Premium growth • proprietary channels Focus on new partnership additions & increase share of shop in existing • Focus to grow annuity line of business Q1- Q1- Y-o-Y Q1- Q1- Channels FY2024 FY2025 Growth FY2024 FY2025 Agency 3.57 5.77 61.6
Slide 14: Premium growth (2/2)
• Build capacity & enhance efficiency in Premium growth (2/2) Premium growth • proprietary channels Focus on new partnership additions & increase share of shop in existing • Focus to grow annuity line of business Q1- Q1- Y-o-Y Q1- Q1- Segments FY2024 FY2025 Growth FY2024 FY2025 Savings 11.17 16.08 4
Slide 15: Distribution & Product mix: Q1-FY2025
Distribution & Product mix: Q1-FY2025 Distribution mix Product mix 15% | Group 3% | Group funds 29% | Agency 11% | Annuity 51% | Linked 12% | 18% | Partnership Protection distribution 29% | Bancassurance 15% | Direct 17% | Non-linked Well diversified product & distribution mix Based on Annualised Pr
Slide 16: Protection growth
Protection growth Protection focus • Focus on retail protection growth • Increase protection with rider attachment • Focus on opportunities in group protection Q1- (₹ billion) FY2024 Sum assured3 (₹ billion) FY2025 Protection APE1 15.25 3.55 2,724.68 Retail protection APE 4.78 1.12 2,403.04 Protecti
Slide 17: Persistency improvement
Persistency improvement Continue to focus on improving persistency across Persistency all cohorts Month Q1-FY2024 FY2024 Q1-FY2025 13th month 86.4% 88.7% 89.7% 25th month 78.0% 79.7% 80.6% 37th month 73.0% 72.0% 72.8% 49th month 66.5% 70.7% 70.7% 61st month 67.3% 65.6% 65.9% Consistent improvement i
Slide 18: Productivity improvement
Productivity improvement Continue to leverage technology for process re- Productivity engineering & to drive productivity (₹ billion) Q1-FY2024 Q1-FY2025 Y-o-Y Growth Total APE 14.61 19.63 34.4% Total expenses 14.98 19.87 32.7% Cost/TWRP1 27.7% 32.6% - Cost/TWRP1 (savings LOB) 18.8% 19.2% - Capacity
Slide 19: Resilient balance sheet
Resilient balance sheet Insurance risks Strong solvency ratio • Emerging mortality experience within • Solvency ratio of 187.9% at June 30, 2024 expectation • Ability to raise additional sub debt • Persistency experience monitored regularly High quality assets1 Liability profile1 • 96.3% of fixed in
Slide 20: VNB growth levers update (4P)
VNB growth levers update (4P) (₹ billion) Q1-FY2024 FY2024 Q1-FY2025 Value of New Business (VNB) 4.38 22.27 4.72 VNB VNB margin 30.0% 24.6% 24.0% (₹ billion) Q1-FY2024 FY2024 Q1-FY2025 Premium growth (APE) 14.61 90.46 19.63 Protection growth (APE) 3.44 15.25 3.55 4P 13th month1 86.4% 88.7% 89.7% Per
Slide 21: Other financial metrics
Other financial metrics (₹ billion) Q1-FY2024 FY2024 Q1-FY2025 Profit after Tax 2.07 8.52 2.25 Solvency ratio1 203.4% 191.8% 187.9% AUM1 2,664.20 2,941.40 3,088.75 AUM of over ` 3 trillion covering 98.4 million lives Total in-force sum assured of ₹ 35.1 trillion 1 Q1: At June 30 of respective financ
Slide 22: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG)
Slide 23: ESG update & framework
ESG update & framework Disclosure under IR1 E S G ESG rating by MSCI framework FY2024 nvironmental ocial overnance Integrated AA annual report Focus areas since FY2020 A A • Environment • Human • Governance & Capital business • Responsible ethics investing • Data privacy B & security ESG report • Ac
Slide 24: 4D framework
4D framework 4D framework enabling our 4P strategy 4P strategy Data Diversified analytics propositions Protection Customer centricity Premium VNB Customer continues Growth Growth Persistency to be at the core Depth in Digitalisation Productivity Partnerships Risk calibrated growth with focus on Inte
Slide 25: ICICI Pru Stack: Suite of platform capabilities
ICICI Pru Stack: Suite of platform capabilities 1. Data analytics Array of platform capabilities to help 2. Diversified us deliver superior propositions value propositions 3. Digitalisation to our customers, 4. Depth in in collaboration Partnerships with our partners CKYC: Central Know Your Customer
Slide 26: 4D: Data analytics
4D: Data analytics
Slide 27: Customer centric analytics powering New Business
Customer centric analytics powering New Business Understanding Satisfying Identifying right Seamless process customer customer need distribution Intelligent Product ML based Longevity & risk customer recommendation upsell/cross sell profiling models segmentation engine propensity models Micro market
Slide 28: Customer centric analytics powering Operations
Customer centric analytics powering Operations Enabling Driving customer Faster settlement Managing maturity renewals satisfaction of claims & foreclosure ML based lapse Early warning Robust claims Smart MAFC propensity model model for customer investigation reinvestment dissatisfaction framework fr
Slide 29: Analytics engine powering Business & Product
Analytics engine powering Business & Product Agency Banca/PD Direct Product Analytics driven Analytics driven ML based leads Geographic agent activation campaign strategy assistance product segments Incentives efficacy Pre-issuance Personalized online Market household framework journey integration b
Slide 30: AI & ML fueling business excellence
AI & ML fueling business excellence Persistency management AI based risk management Focus on extensive utilisation of AI & ML along Utilising AI across policy life stages to provide with data analytics to mitigate insurance risk at superior customer experience onboarding stage Output: Customer Model
Slide 31: 4D: Diversified propositions
4D: Diversified propositions
Slide 32: Products for every life stage need
Products for every life stage need Linked Part Guaranteed Long-term Life Guaranteed savings protection Customer needs Retirement Healthcare planning Deliver value proposition to serve varied customer needs ICICI Pru GPP Flexi with BE: Level based commission payout New product variant ICICI Pru Plati
Slide 33: Innovation across product categories
Innovation across product categories Savings Annuity & Pension Protection & Health • Flexibility to choose level of • Enhances customer protection between SA, fund proposition of underlying value or combination of both base policy • Waiver of premium on • Increasing income • Industry 1st feature* th
Slide 34: 4D: Digitalisation
4D: Digitalisation
Slide 35: Leveraging technology to deliver value
Leveraging technology to deliver value 98% digital logins & 100% ~9 million digital service e-insurance account for interactions every month eligible base 96.2% service interactions 3 million+ app downloads are via self-help / digital modes Highly rated on App store (4.5) 98% of pages with system &
Slide 36: Digital infrastructure
Digital infrastructure CKYC Digital GST based Digital provident Financial ecosystem Digital recurring Pre-population income estimate fund statement for bank payment solution CKYC* GST^ EPFO^ Account Digital SI@ Aggregator^ Aadhaar* Perfios^ CAS^ Vahan^ Pull OTP@ * Used for KYC ^ Income estimation @
Slide 37: New business & growth
New business & growth Pre-sales Onboarding & issuance Partner integration • Collaboration platform • InstaPlan • Retail partners: Online meetings, joint sales calls, Pre-sales tool to create customised Partner integration portal | Easy UI invite experts & share content solution for customer by combi
Slide 38: Customer service
Customer service Empowering customers Omni channel • Self service • Customer mobile application 1. ~9 mn digital service interactions monthly 3 mn+ app downloads with best app rating among the 2. >96.2% service interactions are via self-help/ digital modes peers • Renewals • 24x7 chat/voice assistan
Slide 39: 4D: Depth in Partnerships
4D: Depth in Partnerships
Slide 40: Channel reach & strategy
Channel reach & strategy 43 banks 29% | Bancassurance 1 Strategy: Build profitability 1,159 partnerships 15%1 | Direct2 • Access to >21,500 bank branches 12%1 | Partnership Distribution Strategy: Digital focused • Protection & Annuity mix 17% Strategy: Create depth & upsell campaigns add width • Ana
Slide 41: Awards & Accolades
Awards & Accolades
Slide 42: Awards & Accolades: Q1-FY2025
Awards & Accolades: Q1-FY2025 Best Use of Innovation to Best Use of Technology to Best Use of Customer Analytics, Best Sustainability Report Enhance Customer Experience Enhance Customer Experience Insights and Metrics Customer FEST Awards 2024 - Customer FEST Awards 2024 Customer FEST Awards 2024 Th
Slide 43: Agenda
Agenda • Company strategy & performance • Opportunity & industry overview
Slide 44: Opportunities in the Indian life insurance industry
Opportunities in the Indian life insurance industry Long-term savings Protection Strong multi-decadal Steady growth opportunity growth opportunity Life insurance currently occupies a mere 18% of The protection gap of $16.5 trillion2 in the country the total household financial savings in India as of
Slide 45: Long-term savings: Favorable demography
Long-term savings Favorable demography opportunity Large & growing population base1 High share of working population in India1 Population in mn Population in mn (age group 25-59 years ) 1,407.6 1,425.9 736.1 273.8 337.0 124.6 145.1 214.3 645.6 51.8 59.4 India Japan Brazil Indonesia S Korea USA S Afr
Slide 46: Financialisation of savings
Long-term savings Financialisation of savings opportunity Household savings1 Distribution of financial savings (including currency)2 80% 85 71% ` tn 61% 63% 65 57% 52% 56% 60% 60% 17% 52% 18% 17% 45% 41% 17% 17% 18% 45 40% 35.46 36% 20.86 28.28 39% 17% 23.70 40% 19.54 25 13.64 29% 14.53 31.09 20.61
Slide 47: Protection: Low protection penetration
Protection Low protection penetration opportunity Sum assured as % of GDP1,2 Addressable population# Protection gap(%)4,5 332% coverage3 (%) 83 61 55 54 76 71 74 55 252% 251% 16.5 153% 143% 15% 127% USD trillion 8.4 3.9 21% 2.8 2.0 0.9 0.7 0.6 USA* Thailand* Japan* South Korea* Malaysia* India** Sin
Slide 48: Protection: Low sum assured as % of GDP
Protection Low sum assured (SA) as % of GDP opportunity A SA as % of GDP (SA growth @ 20% CAGR) SA as % of GDP1,2 65% 332% India: FY2035 39% 252% 251% 21% 25% B 153% 143% A 127% 107% FY2023 FY2025 FY2030 FY2035 65% 21% B SA as % of GDP (SA growth @ 25% CAGR) Singapore (25%CAGR)* (20%CAGR)* Thailand
Slide 49: Protection: Addressable population
Protection Addressable population (%) opportunity 15% CAGR in new policy count1 20% CAGR in new policy count1 143.3 143.3 102.2 102.2 72.8 72.8 63.6 63.6 29% 41% in mn in mn 59.3 40.9 24.8 20.9 9.3 11.7 9.3 11.4 FY2023 FY2025 FY2030 FY2035 FY2023 FY2025 FY2030 FY2035 Insured Uninsured Insured Uninsu
Slide 50: Protection: Strong growth in retail credit
Protection Strong growth in retail credit opportunity Retail credit1 ₹ billion 40,852 33,870 21,488 25,534 17,026 19,085 12,144 13,922 9,339 10,097 6,454 19,364 4,711 16,844 13,390 7,468 9,746 5,386 Mar'14 Mar'16 Mar'18 Mar'20 Mar'22 Mar'23 Home Loans Others • Healthy growth in retail credit • Credi
Slide 51: Retirement: Rising retirement population in India
Retirement Rising retirement population in India opportunity Demography shift over next ~25 years1 Faster growth of ageing population2 Age group 2024 2050 100+ 95-99 Future client 90-94 ~35% of the base seeking 85-89 overall annuity population income 234 80-84 75-79 Today’s 70-74 client base 65-69 ~
Slide 52: Retirement needs under-served
Retirement Retirement needs under-served opportunity Retirement savings gap projections1 Pension assets/GDP2 5.0% 7.4% 3.7% 2.3% 9.6% 159.0% Projected retirement savings gap widening CAGR 145.0% 132.1% $ trillion 170 130 80.0% 96 64.5% 56.0% 46 32 19 22 12.8% 12 12 8 6.5% US China UK Japan India 202
Slide 53: Indicators of health opportunity
Health Indicators of health opportunity opportunity Health insurance premium trend1 % of population covered by health schemes2 ₹ billion Uncovered 895 population 731 253 30% 582 508 200 449 151 252 137 201 51% 107 159 107 124 391 9% 272 329 235 246 10% FY2019 FY2020 FY2021 FY2022 FY2023 Government P
Slide 54: Evolution of life insurance industry in India
Evolution of life insurance industry in India Industry overview FY2002 FY2010 FY2015 FY2023 21.5% (5.8%) New business premium1 (` bn) 116 550 408 12.4% 1,040 11.5% Total premium (` bn) 501 23.2% 2,654 4.3% 3,281 7,825 Penetration (as % to GDP) 2.1% 4.1% 2.6% 3.0% 12.6% 11.0% Assets under management
Slide 55: Historical product & channel mix
Historical product & channel mix IndustryIndustry overviewoverview Industry Private sector 18% 20% 22% 19% 44% 39% 40% 32% Product mix1 Linked 82% 80% 78% 81% Non-linked 56% 61% 60% 68% FY2020 FY2021 FY2022 FY2023 FY2020 FY2021 FY2022 FY2023 12% 13% 13% 14% 22% 22% 22% 24% Channel mix2 28% 29% 32% 3
Slide 56: Annexures: Others
Annexures: Others
Slide 57: Retirement focus: ICICI Pru PFM
Retirement focus: ICICI Pru PFM Total subscribers Assets under management Net inflows growth growth growth 28% 30% 58% 78% 44% 188% Y-o-Y Y-o-Y Y-o-Y ₹ billion 331.95 ₹ billion in ‘000 807.24 30.14 619.15 186.18 10.46 Jun-23 Jun-24 Jun-23 Jun-24 Q1-FY2024 Q1-FY2025 40% of NPS retirement corpus manda
Slide 58: Trend in protection APE
Trend in protection APE FY2022 FY2023 FY2024 ₹ 3.94 bn | ₹ 3.26 bn | ₹ 4.78 bn | ₹ 5.67 bn | Retail ₹ 6.97 bn | Retail ₹ 4.45 bn | Retail Group term protection Group term protection Group term protection 43.2% 30.0% 46.3% 21.7% 29.2% 31.3% ₹ 13.13 bn ₹ 15.04 bn ₹ 15.25 bn ₹ 3.52 bn | ₹ 4.81 bn | ₹ 6
Slide 59: Interest rate risk management
Interest rate risk management Guaranteed return savings product • Derivatives used to lock in yields for future premiums • Underlying bonds for derivatives selected based on tenure of liability Retail protection business • Asset liability duration matching Annuity products • Duration matching & cash
Slide 60: Retail persistency: FY2024
Retail persistency: FY2024 Persistency across product categories 13th month 49th month 88.4% 88.8% 91.6% 83.0% 84.4% 65.9% Linked Non linked Protection Persistency across channel categories 13th month 49th month 91.7% 91.3% 90.9% 76.8% 83.7% 83.4% 68.4% 66.5% Agency Direct Bancassurance Partnership
Slide 61: Value of New Business (VNB)
Value of New Business (VNB) VNB contribution* VNB margin movement 32.0% (1.5)% FY2023 FY2024 (4.1)% (1.8)% VNB 24.6% ` billion 27.65 22.27 2.01 2.61 (7.3%) (11.7%) 10.87 11.44 (39.3%) (51.4%) 14.77 8.22 (53.4%) (36.9%) FY2023 Business Operating Economic FY2024 Mix Assumptions Assumptions Protection
Slide 62: Average APE by product categories
Average APE by product categories Average policy term* (years) 34 35 Segment (₹) FY2023 FY2024 17 19 ULIP 177,057 182,940 Savings Protection Non-linked savings 119,748 114,033 Average customer age* (years) Protection 23,086 36,284 43 43 35 35 Total 118,928 130,593 Savings Protection FY2023 FY2024 *
Slide 63: Channel wise product mix
Channel wise product mix1 Channel category Product category FY2022 FY2023 FY2024 ULIP 70.7% 57.0% 58.6% Non-linked savings 19.2% 31.7% 30.3% Bancassurance Annuity 4.9% 7.3% 5.2% Protection 5.2% 4.0% 5.9% Total 100.0% 100.0% 100.0% ULIP 42.6% 35.6% 46.0% Non-linked savings 48.8% 55.4% 30.6% Agency An
Slide 64: Product wise channel mix
Product wise channel mix1 Product category Channel category FY2022 FY2023 FY2024 Bancassurance 57.0% 46.6% 38.8% Agency 20.8% 26.1% 31.0% ULIP Direct 19.6% 23.7% 24.6% Partnership distribution 2.6% 3.6% 5.5% Total 100.0% 100.0% 100.0% Bancassurance 27.3% 25.0% 33.6% Agency 42.1% 39.1% 34.5% Non-link
Slide 65: Annexures: Embedded value
Annexures: Embedded value
Slide 66: Embedded value (EV)
Embedded value (EV)1 423.37 356.34 115.80 87.82 ₹ billion 307.56 268.52 Mar-23 Mar-24 Value of In-force (VIF) Adjusted net worth (ANW) Continued strong growth in VIF 1As per Indian Embedded value (IEV) method Total may not add up due to rounding off 65
Slide 67: Analysis of movement in EV
Analysis of movement in EV 16.91 (0.06) 423.37 22.27 (0.56) (2.88) 0.00 (0.08) 30.71 0.70 356.34 ANW EVOP1 = 50.17 115.80 ANW ROEV2 = 14.1% 87.82 ₹ billion VIF VIF 307.56 268.52 EV (Mar 31, Unwind Operating VNB Persistency Mortality Expense Other Economic Net Capital EV (Mar 31, 2023) Assumption var
Slide 68: Analysis of movement in EV
Analysis of movement in EV1 ` billion FY2020 FY2021 FY2022 FY2023 FY2024 Opening EV 216.23 230.30 291.06 316.25 356.34 Unwind 17.25 16.61 20.85 27.08 30.71 Value of New Business (VNB) 16.05 16.21 21.63 27.65 22.27 Operating assumption changes + Operating variance (0.42) 2.24 (10.56) 0.15 (2.81) Oper
Slide 69: Sensitivity analysis
Sensitivity analysis % change in VNB % change in EV Scenario FY2023 FY2024 FY2023 FY2024 Increase in 100 bps in the reference rates (4.2) (11.7) (3.5) (3.5) Decrease in 100 bps in the reference rates 4.8 10.9 3.7 3.8 10% increase in the discontinuance rates (3.4) (4.8) (0.5) (0.4) 10% decrease in th
Slide 70: Economic assumptions underlying EV & VNB
Economic assumptions underlying EV & VNB Reference rates Tenor (years) March 31, 2024 June 30, 2024 1 7.2% 7.1% 5 7.3% 7.2% 10 7.2% 7.2% 15 7.3% 7.2% 20 7.3% 7.3% 25 7.4% 7.3% 30 7.4% 7.4% EV: Embedded value VNB: Value of new business 69
Slide 71: Glossary (1/2)
Glossary (1/2) • Annualized Premium Equivalent (APE): APE is the sum of the annualized first year premiums on regular premium policies, & ten percent of single premiums, from both individual & group customers • Retail Weighted Received Premium (RWRP): Premiums actually received by the insurers under
Slide 72: Glossary (2/2)
Glossary (2/2) • Value of New Business (VNB): VNB is used to measure profitability of the new business written in a period. It is present value of all future profits to shareholders measured at the time of writing of the new business contract. Future profits are computed based on long-term assumptio
Slide 73: 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
Slide 74: Thank you
Thank you FY2024 Annual Sustainability FY2024 ESG Report factsheet Report
ICICI Prudential Life Insurance Company — Investor Presentation (October 2024) on 6ix