Moderate valuations, healthy prospects for ICICI Pru Life

ICICI Prudential Life Insurance Company (IPRU) reported a weak performance for the January-March quarter (Q4) of FY25, seeing a decline of 3 per cent year-on-year (Y-o-Y) in annualised premium equivalent (APE) to ₹3,500 crore.

- DEVANGSHU DATTA

This is due to a fall in unit-linked insurance plans (Ulips), which constitute 43 per cent of the APE.

The negatives are said to be factored into the price. Value of new business (VNB) margin, a profitability indicator, improved to 22.7 per cent in Q4FY25, up 120 basis points (bps) Y-o-Y and 150 bps quarter-on-quarter (Q-o-Q).

In FY25, embedded value grew 13 per cent with embedded value operating profit (EVOP) growth at 10 per cent Y-o-Y.

However, there were assumption changes in embedded value due to the possibility of higher mortality from the group protection segment (₹250 crore, which is minus 0.6 per cent of opening embedded value), assumption changes in VNB calculation (3.3 per cent impact on VNB) due to higher cost of Ulips, weakening persistency in 49th and 61st months, and a sharp decline in protection VNB margin in FY25 to 54.5 per cent compared with 75 per cent in FY24.

For FY25, APE grew 15 per cent Y-o-Y to ₹10,410 crore.