ICICI Prudential Life Insurance Company Ltd Q2 FY23 Earnings Conference Call Insights

Key highlights from ICICI Prudential Life Insurance Company Ltd (ICICIPRULI) Q2 FY23 Earnings Concall

Management Update:

• ICICIPRULI said that during the half year, it added 15,000 new agents, 3 new banks and 44 non-bank partnerships.

Q&A Highlights:

• [00:22:52] Swarnabha Mukherjee from B&K Securities asked about the ROP product as the run rate remains same across quarters. Satyan Jambunathan CFO replied that it has been consistent at 15-20% over the past three quarters since launch. However, the company is quite happy with the way the business is progressing and added that the focus is more on growing the entire pie.

• [00:25:26] Swarnabha Mukherjee from BNK Securities enquired about pure term side, if any growth is expected in FY23. N. S. Kannan MD replied that on retail protection, on a YonY basis, it’s challenging. Also YonY declines are coming down. And on a sequential basis it has been stable. On demand side, it continues to be stable and growth is expected to come back in 2H23.

• [00:33:59] Avinash Singh from Emkay Global asked about the strain on the annuity portfolio. N. S. Kannan MD said that the strain is a function of mix between single pay and regular pay and also a function of the tenure of the deferral period for annuity.

• [00:35:51] Avinash Singh of Emkay Global enquired about the MTM movement on [FRA] and its impact on solvency and network in 1H23. N. S. Kannan MD clarified that MTM had no impact on solvency as in aggregate the equity plus the FRA portfolio MTM is net positive.

• [00:37:34]  Avinash Singh of Emkay Global asked about the reason for revaluation reserve in property coming down. N. S. Kannan MD answered that it’s just a usual revaluation. It’s got done once a year, and there won’t be any change in this period.

• [00:38:49] Shreya Shivani from CLSA asked about how many bank partners the company is looking to add. N. S. Kannan MD replied that the three new partners got added in 1Q23. In 2Q23, no partner was added and added that since these are small it doesn’t matter to the company.

• [00:39:09] Shreya Shivani with CLSA also asked about any APE guidance for FY23. N. S. Kannan MD answered that the company is still holding on to the expectation of 23% VNB growth. ICICIPRULI feels that even if the APE growth is faster or slower than 1H23, it has a good shot at getting to the objective.

• [00:45:20] Sanketh Godha from Spark Capital asked about the MTM impact on the embedded value in 1H23 number. N. S. Kannan MD replied it has not been disclosed and added that it will be disclosed in the full year results.

• [00:50:02] Dipanjan Ghosh from Citi asked about the counter share on the non ICICI Bank channels. N. S. Kannan MD said that on the other bank partnerships, what the company is seeing is it’s more than proportionately contributing to the growth of their business.  The objective is to expand the pie for them.

• [00:55:16] Neeraj Toshniwal with UBS asked about the group protection pricing recalibration, if it’s totally accounted for. N. S. Kannan MD replied that at renewal the company is seeing a pre-pandemic level pricing. Therefore, every scheme that gets renewed, the company expects that for the next  months, it will be at a lower pricing pre-pandemic.

• [00:56:57] Neeraj Toshniwal with UBS asked about the thoughts on aggregate margin profiling. N. S. Kannan MD answered that there is an overall savings portfolio margin that will be driven by a combination of linked mix, par mix, and non-par mix. The company is not seeing downside risk to margin, but expects stability.