Icici Prudential Life Insurance Co. Ltd. · NSE:ICICIPRULI
Icici Prudential Life Insurance — FY2024 Earnings Presentation
74 slides from Icici Prudential Life Insurance's earnings presentation, Apr 23, 2024
Slide 1: Performance update: FY2024
Performance update: FY2024 April 23, 2024
Slide 2: Agenda
Agenda • Company strategy and performance • Opportunity • Industry overview
Slide 3: Agenda
Agenda • Company strategy and performance • Opportunity • Industry overview
Slide 4: 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 5: 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 6: Performance snapshot: FY2024
Performance snapshot: FY2024 VNB Premium Persistency 13th 89.0% (₹ billion) (₹ billion) 22.27 90.46 Month1 Total APE 49th 68.5% Protection Productivity Cost/TWRP: 24.6% 15.25 15.8% (₹ billion) Savings2 Margin APE 1 Regular & Limited pay persistency in accordance with IRDAI circular on ‘Public Disclo
Slide 7: Consistent improvement in RWRP
Consistent improvement in RWRP ICICI Pru Life Private Industry Overall Industry 16.0% 12.8% 11.5% 10.0% 9.4% 8.0% 5.9% 4.1% 2.5% 2.4% 0.3% -3.6% Q1-FY2024 Q2-FY2024 Q3-FY2024 Q4-FY2024 Robust double-digit RWRP growth in Q4-FY2024 RWRP: Retail weighted received premium Numbers denote year-on-year gro
Slide 8: Customer focused & most partnerable Company
Customer focused & most partnerable Company Industry leading claim settlement ratio Seamless process: ~45% of savings for FY2024 policies issued on same day in Q4-FY2024 Enhanced customer proposition: Extensive suite of products available for Same day commission: Available for varied customer needs
Slide 9: 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 10: 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 Q4- Y-o-Y Y-o-Y Q4- Channels FY2024 FY2024 FY2024 Growth Growth FY2024 Agency 11.61 28.
Slide 11: 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 Q4- Y-o-Y Y-o-Y Q4- Segments FY2024 FY2024 FY2024 Growth Growth FY2024 Savings 31.83 11
Slide 12: Distribution & Product mix: FY2024
Distribution & Product mix: FY2024 Distribution mix Product mix 15% | Group 3% | Group funds 29% | Agency 11% | Annuity 43% | Linked 13% | Partnership 17% | distribution Protection 29% | 14% | Direct Bancassurance 26% | Non-linked Proprietary business contributes Increasing share of annuity & protec
Slide 13: Protection growth
Protection growth Protection focus • Focus on retail protection growth • Increase protection with rider attachment • Focus on opportunities in group protection Retail protection, credit life & Protection APE split: FY2024 group term APE (₹ billion) growth Y-o-Y ₹ 4.45 bn | ₹ 4.78 bn | 46.6% 25.2% (3
Slide 14: Persistency improvement
Persistency improvement Continue to focus on improving persistency across Persistency all cohorts 13th month persistency across product Month FY2023 FY2024 categories: FY2024 13th month 86.6% 89.0% 91.5% 25th month 77.8% 80.5% 89.4% 88.4% 37th month 71.3% 72.3% 49th month 64.2% 68.5% 61st month 65.7
Slide 15: Productivity improvement
Productivity improvement Continue to leverage technology for process re- Productivity engineering & to drive productivity (₹ billion) FY2023 FY2024 Y-o-Y Growth Total expenses 64.75 78.74 21.6% Cost/TWRP1 21.5% 24.0% - Cost/TWRP1 (savings LOB) 14.2% 15.8% - Cost structure realigned post regulatory c
Slide 16: Resilient balance sheet
Resilient balance sheet Insurance risks Strong solvency ratio • Emerging mortality experience within • Solvency ratio of 191.8% at March 31, 2024 expectation • Ability to raise additional sub debt • Persistency experience monitored regularly High quality assets1 Liability profile1 • 95.9% of fixed i
Slide 17: VNB growth levers update (4P)
VNB growth levers update (4P) (₹ billion) FY2023 FY2024 Value of New Business (VNB) 27.65 22.27 VNB VNB margin 32.0% 24.6% (₹ billion) FY2023 FY2024 Premium growth (APE) 86.40 90.46 Protection growth (APE) 15.04 15.25 4P 13th month1 86.6% 89.0% Persistency 49th month1 64.2% 68.5% Productivity (Cost/
Slide 18: 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 18
Slide 19: 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 20: 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 21: 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 22: Financial metrics
Financial metrics (₹ billion) FY2023 FY2024 Profit after Tax 8.11 8.52 Solvency ratio 208.9% 191.8% AUM 2,511.91 2,941.40 Solvency ratio continues to be strong AUM: Assets under management, data as of March 31 of respective FY 22
Slide 23: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG)
Slide 24: ESG update & framework
ESG update & framework Disclosure under IR1 E S G ESG rating by MSCI framework FY2023 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 25: Environmental initiatives
Environmental initiatives • Green energy expanded to • Wet waste converter Reuse & recycle • End to end digital Reduce Replace solutions for our 38 more branches in installed at one of business activities Maharashtra (total 44) Company owned large • Move towards 5 star rated office, enabling waste •
Slide 26: Social initiatives
Social initiatives • Innovative products with • High quality leadership: 77% • 80.4 mn lives impacted by Commitment to Commitment to industry’s first features leadership stability3 , 91% micro insurance products Community employees Customer centricity (refer slide 37 for details) leadership depth4,
Slide 27: Governance structures & policies
Governance structures & policies • Code of conduct Compliance, Risk • Compliance policy: Quarterly Ethical practices & Internal Audit • Diverse Board composition certificate to the Board • Framework for managing Supervisory • 60% IDs including structure Chairman • Risk policy: Investment, conflict o
Slide 28: 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 29: 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 30: 4D: Data analytics
4D: Data analytics
Slide 31: 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 Geographical
Slide 32: 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 33: 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 34: Snapshot of key initiatives FY2024
Snapshot of key initiatives FY2024 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 35: 4D: Diversified propositions
4D: Diversified propositions
Slide 36: Products for every life stage
Products for every life stage Linked Part Guaranteed Long-term Life Guaranteed savings protection Customer needs Retirement Healthcare planning Deliver value proposition to serve varied customer needs New products/riders Additional features launched in FY2024 launched in FY2024 36
Slide 37: Product innovations in FY2024
Product innovations in FY2024 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* that offe
Slide 38: 4D: Digitalisation
4D: Digitalisation
Slide 39: Leveraging technology to deliver value
Leveraging technology to deliver value 98% digital logins & 100% ~3.5 million digital service e-insurance account for interactions every month eligible base 92.8% service interactions 2.8 million+ app downloads are via self-help / digital modes One of the highly rated app: 98% of pages with system 4
Slide 40: Key initiatives FY2024: Digital infrastructure
Key initiatives FY2024: 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 KY
Slide 41: 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 42: Customer service
Customer service Empowering customers Omni channel • Self service • Customer mobile application 1. ~3.5 mn digital service interactions monthly 2.8mn+ app downloads with best app rating among the 2. >92.8% service interactions are via self-help/ digital modes peers • Renewals • 24x7 chat/voice assis
Slide 43: 4D: Depth in Partnerships
4D: Depth in Partnerships
Slide 44: Distribution reach & strategy
Distribution reach & strategy 44 banks 29% | Bancassurance 1 Strategy: Build profitability 1,112 partnerships 14%1 | Direct2 • 5 new bank tie-ups done 13%1 | Partnership Distribution Strategy: Digital focused • Access to >21,000 bank branches Strategy: Create depth & upsell campaigns add width • Pro
Slide 45: Awards & Accolades
Awards & Accolades
Slide 46: Awards & Accolades: Q4-FY2024
Awards & Accolades: Q4-FY2024 Customer Service Customer Experience Customer Centric Best Use of Data Analytics Company of the Year Team of the Year Excellence Award in Customer Insights (LI) Synnex India Synnex India World HRD Congress Quantic India Best Life Insurance Co. Best Life Insurance Co. Be
Slide 47: Agenda
Agenda • Company strategy and performance • Opportunity • Industry overview
Slide 48: Favorable demography
Favorable demography Large & growing population base1 High share of working population1 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 Africa China Russia FY2021 FY2030 Driving
Slide 49: Financialisation of savings: Opportunity for insurance
Financialisation of savings: Opportunity for insurance 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 22.
Slide 50: Protection opportunity: Low penetration
Protection opportunity: Low penetration 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 Thailand* USA* South Korea* Japan* Malaysia* India** Singapore* Si
Slide 51: Protection opportunity: Sum assured as % of GDP
Protection opportunity: Sum assured (SA) as % of GDP 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% 65% FY2023 FY2025 FY2030 FY2035 21% B SA as % of GDP (SA growth @ 25% CAGR) Singapore Thailand South Korea (25%CAGR)* (2
Slide 52: Protection opportunity: Addressable population (%)
Protection opportunity: Addressable population (%) 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 Unins
Slide 53: Indicators of protection opportunity
Indicators of protection opportunity Retail credit1 Health & motor2 40,852 ₹ billion 33,870 Gross direct premium (` billion) FY2024 21,488 25,534 Health 1,090.06 17,026 19,085 12,144 Motor 917.81 13,922 9,339 10,097 6,454 19,364 Motor own damage (OD) 373.26 4,711 16,844 13,390 9,746 7,468 5,386 Moto
Slide 54: Agenda
Agenda • Company strategy and performance • Opportunity • Industry overview
Slide 55: Evolution of life insurance industry in India
Evolution of life insurance industry in India 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 (` tn) 2.3 24.0% 1
Slide 56: Industry overview: product and channel mix
Industry overview 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% 33% Others 53% 55% 55% 53% Bancassurance 60% 58% 5
Slide 57: Annexures
Annexures
Slide 58: Retirement focus: ICICI Pru PFM opportunity
Retirement focus: ICICI Pru PFM opportunity Total subscribers Assets under management Net inflows growth growth growth 30% 27% 42% 73% 40% 80% Y-o-Y Y-o-Y Y-o-Y ₹ billion 284.19 ₹ billion 79.24 in ‘000 753.06 164.66 44.02 593.70 Mar-23 Mar-24 Mar-23 Mar-24 FY2023 FY2024 40% of NPS retirement corpus
Slide 59: 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 60: 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 61: Awards & Accolades: FY2024 (1/3)
Awards & Accolades: FY2024 (1/3) Customer Service Customer Experience Customer Centric Best Use of Data Analytics Company of the Year Team of the Year Excellence Award in Customer Insights (LI) Synnex India Synnex India World HRD Congress Quantic India Best Life Insurance Co. Best Life Insurance Co.
Slide 62: Awards & Accolades: FY2024 (2/3)
Awards & Accolades: FY2024 (2/3) Best Use of Technology Best Transformative Best Technology Enabled Best Innovation and in Customer Service (LI) Security Initiative (LI) Transformation – Runner Up Diversification – India Quantic India Quantic India ASSOCHAM Award ICC Sales Champion - Life Gold Award
Slide 63: Awards & Accolades: FY2024 (3/3)
Awards & Accolades: FY2024 (3/3) Best Overall Sustainable Best Sustainability Report Best Sustainability Report Performance Asia’s Best CSR Practices National Awards for Excellence National Awards for Excellence Awards by CMO Asia in CSR & Sustainability in CSR & Sustainability Organisational Best U
Slide 64: Retail persistency: FY2024
Retail persistency: FY2024 Persistency across product categories 13th month 49th month 88.4% 89.4% 91.5% 77.2% 74.7% 65.7% Linked Non linked Protection Persistency across channel categories 13th month 49th month 92.2% 91.3% 90.7% 84.7% 74.0% 76.7% 67.3% 65.1% Agency Direct Bancassurance Partnership
Slide 65: 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 66: 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 67: 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 68: Embedded value
Embedded value
Slide 69: 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 70: Economic assumptions underlying EV & VNB
Economic assumptions underlying EV & VNB Reference rates Tenor (years) March 31, 2023 March 31, 2024 1 7.2% 7.2% 5 7.5% 7.3% 10 7.6% 7.2% 15 7.7% 7.3% 20 7.7% 7.3% 25 7.7% 7.4% 30 7.7% 7.4% EV: Embedded value VNB: Value of new business 70
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
ICICI Prudential Life Insurance Company — FY2024 Earnings Presentation on 6ix