ICICI Pru: Reinsuring growth prospect

Shares of ICICI Prudential Life Insurance (ICICI Pru) hit a new high of Rs 660.95 as they rallied 9% on the BSE in intra-day trade on Thursday after reporting strong earnings for the quarter ended June 2021 (Q1FY22).
The APE (annualised premium equivalent) grew ahead of estimates at 7% and the company delivered a significant beat on VNB (value of the new business) margins (+637 bps), driven by a higher share of protection and annuity.
The stock of the life insurance company surpassed its previous high of Rs 635.40 touched on July 7, 2021. In the past three months, it beat the market by surging 31%, as compared to a 10% rise in the S&P BSE Sensex.
The VNB, which is a measure of the profitability of the company, grew by 78% year-on-year (YoY) to Rs 358 crore for Q1FY22.

The VNB margin expanded from 24.4% in Q1FY21 to 29.4% in Q1FY22. The growth in VNB has been driven by a resilient business model, innovative product offerings and diversified distribution and product mix.
The company’s new business premium grew by 71% to Rs 2,559 crore for Q1FY22 over the same period last year, reflecting strong growth momentum in the business. Significantly, the company gained an overall market leadership position in terms of new business sum assured, with a market share of 14.7% in Q1FY22, up from 12.5% for FY2021.
With this strong growth momentum along with the company’s well-diversified product and distribution mix, the management believes the company is well-positioned to achieve its stated objective of doubling its FY2019 VNB by FY2023.

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