Q3 Results Review and Expectation on ICICI Prudential Life Insurance Company Ltd

ICICI Prudential Life Insurance Company Ltd carries on business of providing life insurance, pensions and health insurance products to individuals and groups. The business is conducted in participating, non-participating and unit linked lines of business. These products are distributed through individual agents, corporate agents, banks, brokers, sales force and company's website. It is promoted by ICICI Bank and Prudential Corporation :- ICICI Bank (51% stake) - The company is a part of ICICI Bank Ltd which is the 2nd largest private bank in India. It offers a diversified range of products and services to retail, SME and corporate customers. Prudential Plc (22% stake) - It is a British multinational insurance company based in London, England. It is the largest UK life insurer in Asia with presence in India, China, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines and other Asian countries. It is also present in African subcontinent in Nigeria, Ghana, Togo and other countries. • Co. reported 19% Value of New Business (VNB) growth in Q3FY25, higher than peers. • The large group business, however, led to a margin miss. • The company is investing well in building its franchise and is on the track of accelerating VNB. • Revise estimates; retain BUY with an FV of Rs825 (Rs850 earlier). Q3FY25 Earnings Update: Positives: • ICICI Prudential Life reported strong 28% yoy growth in Annualized Premium Equivalent (APE). • VNB was up 19%; better than peers (9-11% for HDFC Life and SBI Life). • Co. has been investing with a focus on single insurer channels with 26% growth in agency and 23% growth in direct business. • Lower margins and large headroom for non-par can provide tailwinds. • It continues to report an improving persistency trend. Negatives: • VNB margins compressed by 166 bps yoy to 21.2% in Q3FY25. • Co. reported muted 9% yoy growth in protection APE.