Icici Prudential Life Insurance Co. Ltd. · NSE:ICICIPRULI
Icici Prudential Life Insurance — Investor Presentation (March 2024)
76 slides from Icici Prudential Life Insurance's investor presentation, Mar 7, 2024
Slide 1: Cover letter to stock exchanges: Investor presentation
March 7, 2024 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 pres
Slide 2: Performance update
Performance update March 07, 2024
Slide 3: February 2024 update
February 2024 update
Slide 4: Premium growth
Premium growth Q1- Q2- Q3- January February 11M- ` billion FY2023 FY2024 FY2024 FY2024 2024 2024 FY2024 RWRP1 67.38 10.61 15.74 15.79 6.63 8.37 57.13 Y-o-Y growth 7.0% (3.6%) 4.1% 10.0% 22.3% 33.9% 9.5% APE2 86.40 14.61 20.62 19.07 8.09 10.33 72.72 Y-o-Y growth 11.7% (3.9%) 3.2% 4.7% 8.0% 38.5% 6.4%
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 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: 9M-FY2024
Performance snapshot: 9M-FY2024 VNB Premium growth Persistency 13th 87.4% (₹ billion) (₹ billion) 14.51 54.30 Month1 Total APE 49th 67.1% Protection Productivity Cost/TWRP: 26.7% 10.92 16.3% (₹ billion) Savings2 Margin APE 1 Regular & Limited pay persistency in accordance with IRDAI circular on ‘Pub
Slide 10: Customer focused & most partnerable Company
Customer focused & most partnerable Company Best claim settlement ratio among private insurers Seamless process: ~40% of savings for Q1-FY2024 & Q2-FY2024 policies issued on same day in Q3-FY2024 Enhanced customer proposition: Complete suite of products available for varied customer needs Same day c
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: 4P: Premium growth
4P: Premium growth
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 Q3- 9M- Q3- 9M- Channels Growth Growth FY2024 FY2024 FY2024 FY2024 Agency 5.78 12.0% 14
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 Q3- 9M- Q3- 9M- Segments Growth Growth FY2024 FY2024 FY2024 FY2024 Savings 15.49 4.6% 4
Slide 15: Premium growth: Product & Distribution
Premium growth: Product & Distribution Product mix Distribution mix 4% | Group funds 9M-FY2024 9M-FY2024 17% | Group 6% | Annuity 43% | Linked 27% | Agency 13% | 20% | Partnership Protection distribution 28% | 15% | Direct 27% | Non-linked Bancassurance Well diversified product & distribution mix Ba
Slide 16: 4P: Protection
4P: Protection
Slide 17: Protection growth
Protection growth Protection focus • Focus on retail protection growth • Increase protection with rider attachment • Focus on opportunities in group protection (₹ billion) 9M-FY2023 9M-FY2024 Retail protection APE ₹ billion Protection APE1 10.50 10.92 3.43 3.26 Retail protection 2.20 3.43 APE Protec
Slide 18: 4P: Persistency
4P: Persistency
Slide 19: Persistency improvement
Persistency improvement Continue to focus on improving persistency across Persistency all cohorts 8M- 8M- 8M- 8M- Month FY2023 FY2023 FY2023 FY2024 FY2023 FY2024 13th Month 86.1% 85.4% 87.4% 100.0% 99.9% 99.8% Fully paid & Single premium Regular & Limited pay 25th Month 77.1% 77.1% 79.6% 99.9% 99.7%
Slide 20: 4P: Productivity
4P: Productivity
Slide 21: Productivity improvement
Productivity improvement Continue to leverage technology for process re- Productivity engineering & to drive productivity 9M- 9M- Y-o-Y (₹ billion) FY2023 FY2023 FY2024 Growth Total expenses 41.44 64.75 53.16 28.3% Cost/TWRP1 20.8% 21.5% 25.3% - Cost/TWRP1 (savings LOB) 13.9% 14.2% 16.3% - Cost stru
Slide 22: Resilient balance sheet
Resilient balance sheet Insurance risks Strong solvency ratio • Emerging mortality experience within • Solvency ratio of 196.5% at December 31, expectation 2023 • Persistency experience monitored regularly • Ability to raise additional sub debt & witnessed improvement across all cohorts High quality
Slide 23: VNB growth levers update (4P)
VNB growth levers update (4P) (₹ billion) 9M-FY2023 FY2023 9M-FY2024 Value of New Business (VNB) 17.10 27.65 14.51 VNB VNB margin 32.0% 32.0% 26.7% (₹ billion) 9M-FY2023 FY2023 9M-FY2024 Premium growth (APE) 53.41 86.40 54.30 Protection growth (APE) 10.50 15.04 10.92 4P 13th month1 86.1% 85.4% 87.4%
Slide 24: Financial metrics
Financial metrics (₹ billion) 9M-FY2023 FY2023 9M-FY2024 Profit after Tax 5.76 8.11 6.79 Solvency ratio1 212.2% 208.9% 196.5% AUM1 2,518.84 2,511.91 2,866.76 Solvency ratio continues to be strong 1. 9M: At December 31 of respective financial years; FY: At March 31 23
Slide 25: Environmental, Social & Governance (ESG)
Environmental, Social & Governance (ESG)
Slide 26: 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 27: 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 28: ICICI Pru Stack: Suite of platform capabilities
ICICI Pru Stack: Suite of platform capabilities Array of platform capabilities to help us deliver superior value propositions to our customers, in collaboration with our partners 1. Data analytics 2. Diversified propositions 3. Digitalisation 4. Depth in Partnerships 27
Slide 29: 4D: Data analytics
4D: Data analytics
Slide 30: 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 31: 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 32: 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 33: Key initiatives 9M-FY2024: AI based risk management
Key initiatives 9M-FY2024: AI based risk management Risk Focus on extensive utilisation of AI & ML along with data analytics to Management mitigate insurance risk at onboarding stage Output: Customer classification Model based on AI / ML algorithm Higher propensity for Lower propensity for fraud fra
Slide 34: 4D: Diversified propositions
4D: Diversified propositions
Slide 35: 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 till date till date 3
Slide 36: Key initiatives 9M-FY2024: Innovation
Key initiatives 9M-FY2024: Innovation Increasing income Rider enhances customer proposition of the underlying base policy Choice of amount of MoneyBack Waiver of premium on death, critical Choice of MoneyBack Year illness & accidental disability Low cover multiple for Ensures benefits continue even
Slide 37: Innovation: ICICI Pru GPP Flexi with Benefit Enhancer
Innovation: ICICI Pru GPP Flexi with Benefit Enhancer • Industry’s first annuity product to give back 100% of the premiums paid at any time • Regular pay deferred annuity plan with Benefit enhancer option • Joint-life with Waiver of Premium option ensures the financial security of the spouse • Offer
Slide 38: 4D: Digitalisation
4D: Digitalisation
Slide 39: Digital @ICICI Prulife
Digital @ICICI Prulife ~3.3 million digital service 99% digital logins & 100% e- interactions every month insurance account for eligible base 2.5 million+ app downloads 92.7% service interactions are via self-help / digital modes One of the highly rated app: 98% of pages with system 4.3 & 4.0 rating
Slide 40: Key initiatives 9M-FY2024: Digital infrastructure
Key initiatives 9M-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
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. ~3.3 mn digital service interactions monthly 2.5mn+ app downloads with best app rating among the 2. >92.7% 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 42 banks 28% | Bancassurance 1 Strategy: Build profitability 1,052 partnerships 15%1 | Direct* • 3 new bank tie-ups done 13%1 | Partnership Distribution Strategy: Digital focused • Access to >20,300 bank branches Strategy: Create depth & upsell campaigns add width • Pro
Slide 45: Awards & Accolades
Awards & Accolades
Slide 46: Awards & Accolades: Q3-FY2024
Awards & Accolades: Q3-FY2024 Indian Chamber of Commerce Quantic India Quantic India ASSOCHAM Award (ICC) Best Use of Technology in Best Transformative Security Best Technology Enabled Best Innovation and Customer Service (Life Insurance) Initiative (Life Insurance) Transformation – Runner Up Divers
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 Japan India Brazil Indonesia USA S Korea S Africa Russia China 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% 56% 60% 17% 52% 52% 18% 17% 17% 45% 41% 17% 45 40% 20.86 17% 36% 28.28 39% 40% 23.70 19.54 25 13.64 14.53 31.09 20.61 22.84 25.98 20% 5 11.
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* Japan* South Korea* India** Malaysia* Singapore* In
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 (25%CAGR)* (20%CAGR)* Thailand Sou
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) FY2023 21,488 25,534 Health 906.68 17,026 19,085 12,144 Motor 812.92 13,922 9,339 10,097 6,454 19,364 Motor own damage (OD) 317.84 4,711 16,844 13,390 9,746 7,468 5,386 Motor
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 growth1 ₹ billion growth1 ₹ billion growth 30% 26% 42% 60% 26% 59% Y-o-Y Y-o-Y Y-o-Y 677.17 234.05 40.46 in ‘000 593.70 164.66 25.45 Mar-23 Dec-23 Mar-23 Dec-23 9M-FY2023 9M-FY2024 40% of NPS retirement
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 using derivatives Annuity products • Durati
Slide 60: Awards & Accolades: 9M-FY2024 (1/2)
Awards & Accolades: 9M-FY2024 (1/2) Indian Chamber of Commerce Quantic India Quantic India ASSOCHAM Award (ICC) Best Use of Technology in Best Transformative Security Best Technology Enabled Best Innovation and Customer Service (Life Insurance) Initiative (Life Insurance) Transformation – Runner Up
Slide 61: Awards & Accolades: 9M-FY2024 (2/2)
Awards & Accolades: 9M-FY2024 (2/2) Asia’s Best CSR Practices Awards by National Awards for Excellence in CSR & National Awards for Excellence in CSR & CMO Asia Sustainability Sustainability Best Sustainability Report Best Overall Sustainable Performance Best Sustainability Report ASSOCHAM Customer
Slide 62: Retail persistency: FY2023
Retail persistency: FY2023 Persistency1 across product categories Regular & Limited pay Fully paid & Single premium 100.0% 100.0% 99.9% 99.8% 100.0% 89.1% 88.7% 91.7% 84.9% 13th month 75.8% 68.9% 49th month 62.6% Linked Non linked Protection Linked Non linked Protection Persistency1 across channel c
Slide 63: Value of New Business (VNB)
Value of New Business (VNB) VNB contribution* VNB margin movement FY2022 FY2023 1.0% (0.5)% 32.0% 3.5% 28.0% VNB ` billion 21.63 27.65 2.01 3.52 (7.3%) (16.3%) 9.24 10.87 (42.7%) (39.3%) 14.77 (53.4%) 8.87 (41.0%) FY2022 Business mix Operating Economic FY2023 Assumptions Assumptions change change Pr
Slide 64: Average APE by product categories
Average APE by product categories Average policy term* (years) 33 34 Segment (`) FY2022 FY2023 16 17 ULIP 163,770 177,057 Savings Protection Non-linked 94,925 119,748 savings Average customer age* (years) 44 43 Protection 22,608 23,086 35 35 Total 100,407 118,928 Savings Protection FY2022 FY2023 * P
Slide 65: Channel wise product mix
Channel wise product mix1 Channel category Product category FY2021 FY2022 FY2023 ULIP 73.3% 70.7% 57.0% Non-linked savings 11.6% 19.2% 31.7% Bancassurance Annuity 4.3% 4.9% 7.3% Protection 10.9% 5.2% 4.0% Total 100.0% 100.0% 100.0% ULIP 33.3% 42.6% 35.6% Non-linked savings 57.0% 48.8% 55.4% Agency A
Slide 66: Product wise channel mix
Product wise channel mix1 Product category Channel category FY2021 FY2022 FY2023 Bancassurance 64.9% 57.0% 46.6% Agency 16.6% 20.8% 26.1% ULIP Direct 16.1% 19.6% 23.7% Partnership distribution 2.5% 2.6% 3.6% Total 100.0% 100.0% 100.0% Bancassurance 17.8% 27.3% 25.0% Agency 49.3% 42.1% 39.1% Non-link
Slide 67: Embedded value
Embedded value
Slide 68: Embedded value (EV)
Embedded value (EV)1 385.29 356.34 326.48 95.66 316.25 87.82 78.51 ` billion 83.60 ` billion 289.63 268.52 247.97 232.66 Mar-22 Mar-23 Sep-22 Sep-23 Value of Inforce (VIF) Adjusted net worth (ANW) Continued strong growth in VIF 1As per Indian Embedded value (IEV) method Total may not add up due to r
Slide 69: Analysis of movement in EV
Analysis of movement in EV 27.65 1.43 0.22 0.03 0.08 (14.49) 356.34 (1.61) (0.30) 27.08 316.25 EVOP1 = 54.88 ROEV2 = 17.4% ANW ANW 87.82 83.60 ` billion VIF VIF 268.52 232.66 EV (Mar 31, Unwind Operating VNB Persistency Mortality Expense Other Economic Net Capital EV (Mar 31, 2022) Assumption varian
Slide 70: Analysis of movement in EV
Analysis of movement in EV1 ` billion FY2019 FY2020 FY2021 FY2022 FY2023 Opening EV 187.88 216.23 230.30 291.06 316.25 Unwind 15.84 17.25 16.61 20.85 27.08 Value of New Business (VNB) 13.28 16.05 16.21 21.63 27.65 Operating assumption changes + Operating variance 8.89 (0.42) 2.24 (10.56) 0.15 Operat
Slide 71: Sensitivity analysis
Sensitivity analysis % change in VNB % change in EV Scenario FY2022 FY2023 FY2022 FY2023 Increase in 100 bps in the reference rates (3.5) (4.2) (4.2) (3.5) Decrease in 100 bps in the reference rates 3.2 4.8 4.6 3.7 10% increase in the discontinuance rates (4.9) (3.4) (1.0) (0.5) 10% decrease in the
Slide 72: Economic assumptions underlying EV & VNB
Economic assumptions underlying EV & VNB Reference rates Tenor (years) March 31, 2023 December 31, 2023 1 7.2% 7.2% 5 7.5% 7.5% 10 7.6% 7.6% 15 7.7% 7.6% 20 7.7% 7.7% 25 7.7% 7.8% 30 7.7% 7.9% EV: Embedded value VNB: Value of new business 71
Slide 73: 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 74: 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 75: 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 76: Thank you
Thank you
ICICI Prudential Life Insurance Company — Investor Presentation (March 2024) on 6ix