ICICI Life Insurance (ICICIPRULI) Q4 09/10 earnings summary

Executive summary

• FY2010 marked the first accounting profit in nine years, achieved through premium growth, cost control and customer retention while sustaining market leadership.

• Strategy centered on customer retention, customer-focused product innovation, distribution delivery, resource optimization and talent retention.

Financial highlights

• Net premium income was Rs. 164.79bn, up 7.6% YoY; gross premium income was Rs. 165.32bn, up 7.7%.

• Profit after tax was Rs. 2.58bn versus a Rs. 7.80bn loss in FY2009; profit before tax was Rs. 2.81bn.

• Investment income of Rs. 176.11bn included Rs. 172.49bn attributable to policyholder unit-linked funds; excluding that component, investment income was Rs. 3.62bn versus Rs. 3.21bn.

• Total expenses declined 7% as total premium rose 8%; expense ratio fell to 15.7% from 18.3%, while overall cost ratio including commission fell to 19.4% from 23.0%.

• Basic EPS was Rs. 1.81 versus a loss of Rs. 5.50; adjusted for fair-value ESOP expense, PAT would be Rs. 2.40bn and basic EPS Rs. 1.69.

Outlook and guidance

• Priorities include continued efficiency gains, customer convenience, product innovation and profitable growth while maintaining leadership.

• New unit-linked products were redesigned to meet regulation limiting reduction in yield at maturity and to improve long-term policyholder value while meeting profit criteria.