ICICI Life Insurance (ICICIPRULI) Q4 06/07 earnings summary

Executive summary

• FY07 delivered rapid expansion: APE rose 103% to Rs. 43.81bn and new business profit (NBP) grew 67% to Rs. 8.81bn; estimated private retail market share was 29.1% on weighted new business premiums for 11M through Feb. 2007.

• Growth came with a statutory after-tax loss of Rs. 6.489bn, primarily attributed to new-business strain and investment in distribution expansion; no dividend was recommended.

Financial highlights

• Premium income increased 86% to Rs. 79.13bn from Rs. 42.61bn; new business premium rose 98% to Rs. 51.62bn and renewal premium reached Rs. 27.51bn.

• Total income was Rs. 87.61bn, versus Rs. 46.84bn in FY06; assets held rose to Rs. 158.18bn from Rs. 88.21bn.

• Shareholder-account loss after tax was Rs. 6.489bn versus Rs. 1.879bn; basic EPS was -Rs. 5.28 versus -Rs. 1.82.

• NBP reached Rs. 8.81bn, up 67% from Rs. 5.277bn; it is a net-of-tax, cost-of-capital-adjusted estimate of future shareholder value from new business.

Outlook and guidance

• Strategy entering FY08 emphasized raising the bar on customer-focused product innovation and customer satisfaction; no quantified FY08 financial guidance was stated.

• NBP sensitivities: a 1% increase in investment income lifted NBP to Rs. 9.348bn, while a 1% decrease reduced it to Rs. 8.229bn; a 1% higher discount rate lowered NBP to Rs. 8.056bn.