ICICI Prudential life has a business mix which is highly concentrated towards the ULIPS
the company has been trying to improve the protection as a % of mix.
Moreover in case of life insurance business costs are front loaded which can be observed from the fact that the company pays a higher commission on new premium.
Key Performance Indicators
1.As regards Q1 the company has grew its APE (Annualised Premium Equalivalent) at 68.4% while industry growth has been 15.3%
2. The company has been able steadily persistency across periods
3.The company has been steadily been able to increase the value of new business that it underwrote in the quarter and increase the new business margin.
4. The company has a wide access to customers due to ICICI Bank
Key Risks
- How will mass surrenders in ULIPs affect its numbers
- Profits are a derived numbers as they are derived by using certain assumptions even a small change in assumptions can affect the numbers very widely
- Not sure about customer satisfaction with the king of products that the company has been selling because returns in ULIPs are linked to markets
I would have been happier if the company sold more protection policies and sold mutual funds for savings portions(however mutual fund business is no where related to icici prudentail life) - Not sure like how this open architecture where a bank can sell insurance product of any insurance company will affect its business
Link for Q1 investor presentation: https://www.iciciprulife.com/content/dam/icicipru/about-us/BusinessPresentations/FY2018/Q1FY2018_Business_Presentation.pdf
Disclosure: Invested