Icici Prudential Life Insurance Co. Ltd. · NSE:ICICIPRULI
Icici Prudential Life Insurance — Investor Presentation (May 2022)
71 slides from Icici Prudential Life Insurance's investor presentation, May 9, 2022
Slide 1: Cover letter to stock exchanges
May 9, 2022 General Manager Vice President Listing Department Listing Department BSE Limited, National Stock Exchange of India Limited Phiroze Jeejeebhoy Tower, ‘Exchange Plaza’, Dalal Street, Bandra-Kurla Complex, Mumbai 400 001 Bandra (East), Mumbai 400 051 Dear Sir/Madam, Subject: Investor presen
Slide 2: Performance update
Performance update May 09, 2022
Slide 3: April 2022 update
April 2022 update
Slide 4: Premium growth
Premium growth ` billion Q4-FY2022 FY2022 April 2022 New business premium 47.88 150.36 8.85 YoY growth (6.7%) 15.4% 37.6% APE1 26.08 77.33 4.86 YoY growth 3.9% 19.7% 36.1% RWRP2 20.74 62.99 3.39 YoY growth (3.5%) 15.5% 32.2% New business sum assured 2,599.83 7,731.46 849.54 YoY growth 26.7% 25.4% 20
Slide 5: Agenda
Agenda • Company strategy and performance • Opportunity • Industry overview
Slide 6: Agenda
Agenda • Company strategy and performance • Opportunity • Industry overview
Slide 7: Key strategic elements
Key strategic elements Protection Customer Integrating centricity Premium VNB ESG with Persistency continues to Growth Growth business be at the core management Productivity Aspiration to double the FY2019 VNB in four years 6
Slide 8: Customer centricity
Customer centricity 89.2% 13th month persistency1 for non-linked savings 52 Number of grievances per 10,000 new business policies (retail) 97.8% Claim settlement ratio2 1.5 Average claims settlement time3 days 1 mn+ Customer mobile app downloads4 Figures are for financial year ended March 2022 1. Re
Slide 9: Premium growth
• Deepen penetration in under-served Premium growth customer segments Premium • Enhance current distribution growth • Create new distribution • Augment capability in Health and Protection • Increase focus on Pension and Annuity ` billion FY2021 Q4-FY2022 FY2022 Annualised premium equivalent 64.62 26
Slide 10: Premium growth: Product and Distribution
Premium growth: Product and Distribution Product mix Distribution mix FY2019 FY2022 FY2019 FY2022 4% 14% 28% 22% 24% 9% 51% 25% 80% 48% 9% 17% 12% 13% 1% 6% 15% 9% 1% 5% 4% 3% Banca-ICICI Bank Banca-Other Banks Agency Direct Linked Non-linked Protection Annuity Group Partnership Distribution Group D
Slide 11: Protection growth
Protection growth Protection Continue to grow both retail and group lines of focus business Sum assured market share2 (%) ` billion FY2021 Q4-FY2022 FY2022 13.4% Protection APE1 10.46 4.57 13.13 12.5% YoY growth (6.3%) 32.8% 25.5% Protection Mix 16.2% 17.5% 17.0% FY2021 11M-FY2022 Continued private
Slide 12: Persistency improvement
Persistency improvement Persistency Improve persistency across all cohorts Persistency# 11M-FY2021* 11M-FY2022 Y-o-Y 13th month 84.8% 85.7% 90 bps 49th month 63.0% 63.7% 70 bps 11M-FY2022 89.2% 13th month persistency# 84.2% 84.0% across product categories Linked Non- linked Protection Significant im
Slide 13: Productivity improvement
Productivity improvement Productivity Continue to leverage technology for process re- engineering and to drive productivity ` billion FY2020 FY2021 FY2022 Growth APE 73.81 64.62 77.33 19.7% Total expenses 44.71 42.20 53.71 27.3% Cost/TWRP1 (%) 15.9% 14.8% 18.6% - Cost/TWRP (savings LOB) (%) 10.4% 9.
Slide 14: Resilient Balance Sheet
Resilient Balance Sheet Insurance risks Strong solvency ratio • COVID-19 claims net of reinsurance of ` 10.17 • Solvency ratio of 204.5% at March 31, 2022 billion for FY2022 • IBNR provisions of ` 0.24 billion held for future COVID-19 claims High quality assets Liability profile • 98% of fixed incom
Slide 15: Value of New Business (VNB)
Value of New Business (VNB) VNB contribution* FY2019 FY2022 ` billion FY2021 FY2022 3.52 4.17 (16.3%) Value of New (31.4%) 9.24 16.21 21.63 (42.7%) Business (VNB) 7.89 1.22 (59.4%) VNB margin 25.1% 28.0% 8.87 (9.2%) (41.0%) Protection Savings: Non-linked Savings: Linked Well diversified pools of pro
Slide 16: Way forward
Way forward Aspire to double the FY2019 VNB by FY2023 VNB ` billion ` billion FY2021 FY2022 Growth 17.0% 21.7% 25.1% 28.0% 21.63 Value of New 16.05 16.21 16.21 21.63 33.4% 13.28 Business (VNB)1 VNB margin 25.1% 28.0% +290 bps FY2019 FY2020 FY2021 FY2022 • Premium growth: Diversified product & distri
Slide 17: Business update
Business update Product Distribution Persistency
Slide 18: Business update
Business update Product Distribution Persistency
Slide 19: Product suite
Product suite Protection Savings Annuity Pure term Linked Par Guaranteed Immediate Term Equity Lump sum Lump sum Deferred Return of Premium Single Premium Group term & Income Deferred Debt Income credit life Short Term Regular Premium Critical illness Income Balanced cover Long Term Comprehensive pr
Slide 20: Products available across all categories
Products available across all categories Non-linked Savings Linked Savings with Guaranteed savings; ULIP: Suite of funds for ULIP: with capital guarantee and equity Immediate/ Deferred Equity and Debt guarantee participation Annuity Retail Protection Group Pure term, term with Critical illness, Pure
Slide 21: Product interventions
Product interventions • Balanced Advantage Fund: Best suited to address volatile market Linked • Sustainability Equity Fund: Industry’s first ESG fund • Short Term Income: Early income starting from second year • Long Term Income: Duration as long as 30 years with life cover during the Non linked in
Slide 22: Performance across segments
Performance across segments APE (` billion) Mix Segments FY2021 FY2022 Growth (%) FY2021 FY2022 Savings 54.16 64.20 18.5% 83.8% 83.0% Linked 30.90 37.38 21.0% 47.8% 48.3% Non-linked 17.79 21.21 19.2% 27.5% 27.4% Annuity 2.29 3.00 31.0% 3.5% 3.9% Group funds 3.18 2.61 (17.9%) 4.9% 3.4% Protection 10.
Slide 23: Protection business
Protection business Protection split based on APE* Total new business sum assured ` billion 0.14 ` billion 0.62 (1.1%) (4.7%) 7,731.46 6,166.84 2.90 (22.1%) 5.67 (43.2%) 3.80 (28.9%) FY2021 FY2022 Group Term Retail protection Credit life - Other Credit life – ICICI Bank Retail protection ROP Sum ass
Slide 24: Pension and Annuity
Pension and Annuity A comprehensive pension provider Annuity Pension fund management (AUM) Annuity mix1 8.4% 17.3% 19.1% ` billion Annuity new business received premium (` billion) 116.14 29.56 22.92 75.59 43.53 10.43 FY2020 FY2021 FY2022 Mar-20 Mar-21 Mar-22 Annuity grew by 29% in FY2022 Pension fu
Slide 25: Business update
Business update Product Distribution Persistency
Slide 26: Enhancing distribution
Enhancing distribution Strategy: Create depth and add width • ~800 partnerships; 107 new partnerships • Protection and Annuity mix 27%, Non- Strategy: Build profitability linked savings 60% Strategy: Digital focused upsell • 27 bank partnerships campaigns • Analytics driven upsell channel • Protecti
Slide 27: Performance across distribution channels
Performance across distribution channels APE (` billion) Mix (%) Channels FY2021 FY2022 Growth (%) FY2021 FY2022 Bancassurance 27.34 30.12 10.2% 42.3% 38.9% ICICI Bank 20.22 19.26 (4.7%) 31.3% 24.9% Other Banks 7.13 10.85 52.2% 11.0% 14.0% Agency 15.39 18.28 18.8% 23.8% 23.6% Direct 8.10 9.97 23.1%
Slide 28: Business update
Business update Product Distribution Persistency
Slide 29: Persistency
Persistency Regular and Limited pay Fully paid and Single premium Month 11M-FY2021 11M-FY2022 Month 11M-FY2021 11M-FY2022 13th month 84.8% 85.7% 13th month 100.0% 100.0% 25th month 73.6% 77.2% 25th month 99.2% 100.0% 37th month 66.3% 67.1% 37th month 97.3% 98.7% 49th month 63.0% 63.7% 49th month 95.
Slide 30: Financial update
Financial update
Slide 31: Value of New Business (VNB)
Value of New Business (VNB) VNB contribution* VNB margin movement FY2021 FY2022 4.3% (2.0)% 28.0% 0.6% VNB 25.1% ` billion 16.21 21.63 3.62 3.52 (22.3%) (16.3%) 9.24 (42.7%) 8.66 3.93 (53.4%) 8.87 (24.2%) (41.0%) FY2021 Business mix Operating Economic FY2022 Assumptions Assumptions change change Pro
Slide 32: Embedded Value
Embedded Value1 ` billion 316.25 291.06 83.60 95.22 232.66 195.84 Mar-21 Mar-22 Value of Inforce (VIF) Adjusted net worth (ANW) VIF grew by 18.8% to ` 232.66 billion and EV grew by 8.7% to ` 316.25 billion 1. As per Indian Embedded value (IEV) method 31 Total may not add up due to rounding off
Slide 33: Analysis of movement in EV
Analysis of movement in EV ` billion 21.63 1.51 (11.87) 0.07 0.64 (4.37) 316.25 20.85 (0.91) (2.36) 291.06 EVOP1 = 31.92 ANW ANW ROEV2 = 11.0% 83.60 95.22 ROEV (ex. mortality & morbidity variance) = 15.0% VIF 232.66 VIF 195.84 EV (Mar 31, Unwind Operating VNB Persistency Mortality and Expense Other
Slide 34: Sensitivity analysis
Sensitivity analysis % change in VNB % change in EV Scenario FY2021 FY2022 FY2021 FY2022 Increase in 100 bps in the reference rates 0.7 (3.5) (2.8) (4.2) Decrease in 100 bps in the reference rates (1.7) 3.2 3.0 4.6 10% increase in the discontinuance rates (3.1) (4.9) (0.9) (1.0) 10% decrease in the
Slide 35: Financial metrics
Financial metrics ` billion FY2021 FY2022 Profit after Tax 9.60 7.54 Solvency ratio 216.8%1 204.5%1 AUM 2,142.181 2,404.921 Total COVID-19 claims 3.54 21.07 COVID-19 claims net of reinsurance 1.98 10.17 Provision for future COVID-19 claims 3.32 0.24 Solvency ratio continues to be strong at 204.5% 1.
Slide 36: VNB growth levers update (4P's)
VNB growth levers update (4P’s) ` billion FY2021 FY2022 Growth Value of New Business (VNB) 16.21 21.63 33.4% VNB margin 25.1% 28.0% ` billion FY2021 FY2022 Growth Premium growth (APE) 64.62 77.33 19.7% Protection growth (APE) 10.46 13.13 25.5% Persistency (13th month)1 84.8% 85.7% Persistency (49th
Slide 37: Environmental, Social and Governance
ENVIRONMENTAL, lug" | SOCIAL AND WS 4 GOVERNANCE ox COMPLIANCE, (=) a = tons < RULES _ - Set @ICICI PRUDENTIAL? =
Slide 38: ESG: Approach and focus areas
ESG: Approach and focus areas Sustainability is intrinsic to life insurance as we serve long term savings and protection needs 3 pillars of our sustainability framework Our focus areas Human Responsible Governance & Capital Investing Business Ethics Environmental Social Governance leaving the planet
Slide 39: Focus areas: Human capital
Focus areas: Human capital Enabling employee Building an agile & engaged Enabling productivity wellbeing workforce 1. 99% employees fully vaccinated 1. Talent attraction & onboarding 1. Enabling a diverse workforce 2. Building awareness • 46% fresher hiring; robust onboarding • Equal opportunity emp
Slide 40: Focus areas: Responsible investing
Focus areas: Responsible investing Three pronged approach ICICI Prudential Stewardship policy and ESG Integration Sustainable Equity process Fund Engaging with investee companies Framework made operational; subscribed to Benchmarked against NSE 100 ESG Index ESG ratings by an external service provid
Slide 41: Focus areas: Governance and Data privacy
Focus areas: Governance and Data privacy Governance Structure Information/Cyber security Data Privacy Policy Cyber Security Framework • Privacy policy covering • Information and Cyber Board composition Board Diversity Evaluation framework collection, usage, storage, Security Policy • >50% IDs includ
Slide 42: Focus areas: Access to finance, CSR and Environment
Focus areas: Access to finance, CSR and Environment Access to Finance CSR Environment • 45.6 mn lives impacted by micro • ₹ 68.2 million spent for CSR initiatives • ~1,700 tonnes of carbon footprint saved insurance products (58.1 mn lives total) • Over 155,000 children and adults through: • 85.7% -
Slide 43: Awards and Accolades – FY2022
Awards and Accolades – FY2022 Featured among the top 20 BSE100 ICICI Pru Guaranteed Pension Plan - Excellence in Claims and Customer companies with strong corporate Innovation During COVID 19 Product of the Year 2021 in the Service governance practices Retirement & Pension category *Scorecard develo
Slide 44: Technology @ICICI Prulife
Technology @ICICI Prulife
Slide 45: Digital@iciciprulife
Digital@iciciprulife Most visited website among private life insurance players Digital logins at 96% ~3 million digital service 80%+ issuances through interactions every month smart OCR / ML >91% service interactions are 1 million+ app downloads via self-help / digital modes Highest rated app within
Slide 46: New business & growth
New business & growth Pre-sales Onboarding & issuance Partner integration InstaPlan - A pre-sales tool to create a Partner integration portal Collaboration platform – customized solution for the customer by Online meetings, joint sales calls, Easy UI – Pre-coded premium combining multiple produc
Slide 47: Customer service
Customer service Empowering customers Omni channel Self service Mobile application ~3 Mn. digital service interactions monthly Awarded ‘Best Mobile App of the Year’ for the >90% service interactions are via self-help / ‘Customer Mobile App’ in the Velocity Awards 2021 digital modes 8 lakh+ app d
Slide 48: Digital experience
Digital experience Personalization Actionable insights Hyper personalization – Nudge engine/ Actionable insights - Data Personalised messages to handhold analytics based system which suggests the best customers throughout journey suited action to achieve the next goal Segmented targeting – Smart sol
Slide 49: Agenda
Agenda • Company strategy and performance • Opportunity • Industry overview
Slide 50: Favorable demography
Favorable demography Large and growing population base1 High share of working population1 2020 Population (mn) Population of age 25-59 years (in mn) 1,380 1,439 727 274 331 631 127 146 213 51 59 China Brazil S Africa Russia USA Japan Indonesia India S Korea 2020 2030 Driving GDP growth2 Rising afflu
Slide 51: Financialisation of savings: Opportunity for insurance
Financialisation of savings: Opportunity for insurance Household savings1 Distribution of financial savings (including currency) 2 80% 85 71% 70% 63% ` tn 61% 65 57% 60% 17% 52% 18% 41% 52% 50% 17% 17% 45% 45 36% 40% 20.86 23.70 40% 19.54 25 13.64 30% 14.53 31.09 20.61 22.84 20% 5 11.91 14.96 -3.59
Slide 52: Protection opportunity: Low penetration
Protection opportunity: Low penetration Sum Assured as a % of GDP1,2 Addressable population# Protection gap(%) 4,5 332% coverage3 (%) 83 61 55 54 76 71 74 55 252% 251% 12% 16.50 153% 143% 127% USD trillion 8.40 3.90 2.80 2.00 23% 0.90 0.70 0.60 Covered by retail protection policies * Total sum assur
Slide 53: Protection opportunity: Sum assured as a % of GDP
Protection opportunity: Sum assured as a % of GDP Sum Assured (SA) as a % of GDP: A Assuming SA growth @ 20% CAGR Sum Assured as a % of GDP1,2 85% 332% India: FY2035 50% 252% 251% B 33% 23% 155% 153% A 143% 127% FY2021 FY2025 FY2030 FY2035 85% Sum Assured (SA) as a % of GDP: 23% B Assuming SA growth
Slide 54: Protection opportunity: Addressable population coverage (%)
Protection opportunity: Addressable population coverage (%) With 15% CAGR in new policy count from FY2020 to FY2035 With 20% CAGR in new policy count from FY2020 to FY2035 244.2 244.2 In million In million 42% 166.2 166.2 26% 103.2 103.2 63.3 63.3 101.9 64.3 31.5 40.8 7.4 14.8 7.4 16.1 FY2021 FY2025
Slide 55: Indicators of protection opportunity
Indicators of protection opportunity Retail Credit1 Health & Motor2 ` billion Gross direct premium 22,207 (` billion) FY2021 19,085 Health 585.72 10,619 13,922 9,339 10,097 Motor 677.90 6,454 4,711 9,746 11,589 - Motor Own Damage (OD) 260.81 7,468 5,386 - Motor Third Party (TP) 417.09 Mar-14 Mar-16
Slide 56: Agenda
Agenda • Company strategy and performance • Opportunity • Industry overview
Slide 57: Evolution of life insurance industry in India
Evolution of life insurance industry in India FY2002 FY2010 FY2015 FY2021 New business premium1 (` bn) 116 21.5% 550 -5.8% 408 10.8% 757 Total premium (` bn) 501 23.2% 2,654 4.3% 3,281 11.4% 6,284 Penetration (as a % to GDP) 2.1% 4.1% 2.6% 3.2% Assets under management (` bn) 2,304 24.0% 12,899 12.6%
Slide 58: Industry overview: Product mix and channel mix
Industry overview Industry Private Sector 26% 18% 20% Product mix1 51% 44% 39% Linked 74% 82% 80% Non-linked 49% 56% 61% FY2019 FY2020 FY2021 FY2019 FY2020 FY2021 11% 12% 13% Channel mix2 21% 22% 22% 27% 28% 29% Others Bancassurance 54% 53% 55% 62% 60% Agency 58% 25% 25% 23% FY2019 FY2020 FY2021 FY2
Slide 59: Annexures
Annexures
Slide 60: Risk management: Non-participating business
Risk management: Non-participating business Guaranteed return savings product • Interest risk hedged through a combination of cash market instruments and derivatives • Premium payment term upto 12 years only • Hedge program designed for each tranche of new business • Locked in yields for future prem
Slide 61: Retail persistency
Retail persistency Persistency1 across product categories Regular and Limited pay Fully paid and Single premium 100.0% 100.0% 100.0% 100.0% 100.0% 89.2% 91.7% 84.2% 84.0% 13th month 73.8% 49th month 62.4% 61.9% Linked Non linked Protection Linked Non linked Protection Persistency1 across channel cat
Slide 62: Average APE by product categories
Average APE by product categories Average policy term* (years) 34 33 Segment (`) FY2021 FY2022 15 16 ULIP 154,702 163,770 Savings Protection Non-linked savings 85,654 94,925 Average customer age* (years) Protection 25,149 22,608 43 44 35 35 Total 85,701 100,407 Savings Protection FY2021 FY2022 * Pro
Slide 63: Channel wise product mix
Channel wise product mix1 Channel category Product category FY2020 FY2021 FY2022 ULIP 86.8% 73.3% 70.7% Non-linked savings 3.3% 11.6% 19.2% Bancassurance Annuity 0.7% 4.3% 4.9% Protection 9.3% 10.9% 5.2% Total 100.0% 100.0% 100.0% ULIP 49.9% 33.3% 42.6% Non-linked savings 39.2% 57.0% 48.8% Agency An
Slide 64: Product wise channel mix
Product wise channel mix1 Product category Channel category FY2020 FY2021 FY2022 Bancassurance 68.2% 64.9% 57.0% Agency 16.3% 16.6% 20.8% ULIP Direct 13.0% 16.1% 19.6% Partnership distribution 2.5% 2.5% 2.6% Total 100.0% 100.0% 100.0% Bancassurance 10.8% 17.8% 27.3% Agency 53.6% 49.3% 42.1% Non-link
Slide 65: Embedded value
Embedded value
Slide 66: Embedded value growth
Embedded value growth ` billion FY2020 FY2021 FY2022 Value of In force (VIF) 151.87 195.84 232.66 Adjusted Net worth 78.43 95.22 83.60 Embedded value1 230.30 291.06 316.25 Return on Embedded Value (ROEV) 15.2% 15.2% 11.0% ROEV excluding mortality & morbidity variance 15.0% 16.3% 15.0% EV growth-pre
Slide 67: Analysis of movement in EV
Analysis of movement in EV1 ` billion FY2018 FY2019 FY2020 FY2021 FY2022 Opening EV 161.84 187.88 216.23 230.30 291.06 Unwind 13.72 15.84 17.25 16.61 20.85 Value of New Business (VNB) 12.86 13.28 16.05 16.21 21.63 Operating assumption changes + Operating variance 10.22 8.89 (0.42) 2.24 (10.56) Opera
Slide 68: Economic assumptions underlying EV
Economic assumptions underlying EV References Rates Tenor (years) Mar 31, 2021 Mar 31, 2022 1 3.91% 4.35% 5 7.38% 7.90% 10 7.93% 8.36% 15 7.48% 7.97% 20 7.02% 7.57% 25 6.72% 7.28% 30 6.55% 7.09% 67
Slide 69: Glossary
Glossary • Annualized Premium Equivalent (APE): APE is the sum of the annualized first year premiums on regular premium policies, and ten percent of single premiums, from both individual and group customers • Assets under management (AUM): AUM refers to the carrying value of investments managed by t
Slide 70: 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 71: Thank You
Thank You
ICICI Prudential Life Insurance Company — Investor Presentation (May 2022) on 6ix