ICICI Life Insurance (ICICIPRULI) Q4 11/12 earnings summary

Executive summary

• FY2012 marked a strong profit recovery amid a challenging post-reform market: profit after tax rose 71.3% to ₹13.84bn while net premium income fell 21.8% YoY.

• Private-sector market share edged up to 16.1% from 16.0%; weighted retail new business declined 23.5%, broadly in line with private-sector contraction.

• Focus remained on profitable growth, balanced distribution, customer service, cost efficiency and technology-enabled operations.

Financial highlights

• Net premium income was ₹139.28bn vs ₹178.17bn in FY2011; gross premium income was ₹140.22bn vs ₹178.81bn.

• Profit before tax rose to ₹14.14bn from ₹8.33bn; profit after tax increased to ₹13.84bn from ₹8.08bn.

• New business premium fell 40.3% to ₹44.41bn; renewal premium declined 8.3% to ₹95.80bn.

• Assets under management increased 3.8% to ₹707.71bn at March 31, 2012, despite weaker equity markets.

• Total expenses declined 5.0% to ₹26.16bn; expenses excluding unit expenses fell to ₹23.89bn from ₹25.51bn.

Outlook and guidance

• Profit stream was expected to remain stable in coming years, supported by higher profit from the in-force book and continued cost control.

• H2 FY2012 new business returned to 34% YoY growth after 53% contraction in H1; balanced distribution and product mix supported the recovery.

• Medium- to long-term prospects were linked to favorable demographics, household savings and low insurance penetration; near-term macro challenges remained.