MUMBAI: ICICI Prudential Life Insurance reported that its June quarter net profit plunged 30% due to expenses incurred on selling policies, but key metrics that determine future prospects improved.The first private sector life insurer to turn public said its net profit for the June quarter fell to 282 crore, from 406 crore a year earlier, the company said in a statement.Our focus continues to be on growing absolute Value of New Business, said NS Kannan, chief executive at ICICI Prudential.
The under-penetration of life insurance in the country presents a great opportunity for customer centric insurers having a diversified distribution architecture like us.Value of New Business, the key metric in an insurers profitability or its strength, grew 34% to 244 crore, from 182 crore a year ago, it said.
VNB is the present value of all future profits which long-term shareholders can reap benefit of.
But its cost ratio increased to 17.5%, from 14.2%, which was key to the fall in its profit.
It is a ratio of all expenses to total weighted received premium.Persistency, the proportion of policy holders who continue to pay premiums, also was strong with 13th month persistency at 85.8% and the 49th month persistency improving to 63.7% from 59.2% a year earlier.The companys market share stood at 11.3% among life insurance companies, on a Retail Weighted Received Premium basis, it said.
RWRP is a new business measure very similar to Annual Premium Equivalent for the retail, also referred to as individual business.Total premium collected climbed 13% to 5,518 crore.