ICICI Life Insurance (ICICIPRULI) Q4 08/09 earnings summary

Executive summary

• FY09 premium income rose 13.2% to Rs 153.56bn as renewal premiums surged 60.6%; new business premium fell 19.3% amid market volatility and risk-averse buyers.

• After-tax loss narrowed 44% to Rs 7.80bn; continued cost reductions and a focus on profitable growth supported the stated path toward break-even over the next few years.

• Private-market leadership continued for a ninth year, with 10.9% market share; funds under management grew to Rs 327.88bn.

Financial highlights

• Gross premium income was Rs 153.56bn, up 13.2%; net premium income was Rs 153.18bn, up 13% YoY.

• New business premium was Rs 64.84bn, down 19.3%; renewal premium reached Rs 88.72bn, up 60.6%.

• Loss before tax was Rs 8.81bn versus Rs 15.43bn; after-tax loss was Rs 7.80bn versus Rs 13.95bn, reflecting new-business strain and infrastructure costs.

• Investment income was a loss of Rs 61.12bn versus income of Rs 29.85bn, largely reflecting unit-linked market-value losses that do not affect shareholder results.

• New Business Profit was Rs 10.04bn, with an 18.9% margin on APE; APE declined 19% to Rs 53.02bn.

Outlook and guidance

• Focus remained on achieving break-even over the next few years through cost management, more profitable products and improved servicing to retain business.

• Growth initiatives were to be tested against profitability and control requirements; management also called for expense-structure changes and elimination of overruns.

• Long-term opportunities identified included protection, pensions, health cover, education savings and retirement planning as incomes and private-sector employment expand.