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MUMBAI : Despite hit by the coronavirus pandemic, ICICI Prudential Life is confident of meeting the 2022-23 target of doubling the value of new business premium over the 2018-19 numbers, and has set an annual growth rate of around 30 per cent for the same.

To attain the objective set in April 2019, the second-largest private sector life insurer will continue to increase its focus on protection and savings products.

ICICI Prudential Life Chief Financial Officer Satyan Jambunathan told PTI in a recent interaction that the company is well on track to meet the 2022-23 target of doubling the value of new business (VNB) premium over the same in 2018-19. "For this, we have also set a target of growing around 30 per cent annually over the next two years."

Its VNB for the nine months of 2020-21 stood at 1,030 crore with a margin of 25.7 per cent, of which 428 crore came in the third quarter.

The company's main focus will be on protection products to meet the target of doubling of VNB by 2022-23. "I am pretty confident that the target is achievable if we grow at 30 per cent over the next two year, which to me is also realistic, despite the fact that the premium is very small for protection policies," he said.

ICICI Prudential leads the private life industry when it comes to protection products with a 13 per cent market share, followed by HDFC Life with 11.7 per cent, and LIC with 15.5 per cent leads the market, though its share is down from over 18 per cent last year.

The second-largest private life insurer, with an asset under management (AUM) of 2.05 lakh crore as of December 2020 after SBI Life (2.09 lakh crore), had closed 2018-19 with new business premium of 1,328 crore, which it wants to double by the end of 2022-23.

To attain the target, ICICI Prudential is driving protection products that clipped at 14 per cent, traditional long-term savings that grew 36 per cent, and annuity that gained 125 per cent year-on-year in the third quarter, said Jambunathan.

He added that protection products have helped the company increase revenue mix to 17.8 per cent so far this fiscal from 14.1 per cent a year-go.

It is also the market leader among private players in new business sum assured with a 13 per cent share, which grew 22.2 per cent as of December, up from 11.8 per cent in FY20, he said.

Jambunathan added that as of the third quarter, AUM jumped to 2,04,872 crore from 1,52,968 crore a year ago.

While traditional long-term savings plans grew 35 per cent in the nine months, protection plan mix improved from 14.1 per cent of annualised premium equivalent (APE) in nine months of 2019-20 to 17.8 per cent of APE in nine months of 2020-21, according to its Q3 earnings filing.

On his long innings at ICICI Prudential having joined it on the second day of the company getting registered from LIC, Jambunathan said insurance is only starting to grow now.

It is still early days for insurance and the best is yet to come as life premium is still a low 2.8 per cent of GDP. There is a huge scope for the industry to grow as it's still under-penetrated. Sum insured of retail insurance is hardly 20 per cent of gross domestic product, he said.

Recalling the early days, he said when the market was opened after 44 years of nationalisation in 2000, LIC was the only player and had an AUM 1.5 lakh crore despite being the monopoly.

He said this has crossed 40 lakh crore today; of which, as much as 31 lakh crore of AUM is still with LIC. "But, in 20 years, we had the same AUM and this has crossed  2 lakh crore now. All the top three private players each is bigger than LIC 20 years ago now."

In comparison, third-largest private player HDFC Life has an AUM of 1,65,623 crore in 20 years of operations, while second-largest ICICI Prudential has 2,04,872 crore, and the largest private player SBI Life has 2,09,500 crore of AUM as of third quarter. This only shows how big is the market for everyone to grow, he said.

One of the main reasons for this is that over the years, life insurance has moved to protection from savings/death and as a result, LIC had 1.6 lakh crore of new business income and the rest of the industry had 6 lakh crore from protection alone, he said.

When it comes to market share based on the sum assured, HDFC Life, which had the largest share, is down to the third position now with an 11.7 per cent share as of February 2021, down from 20 per cent a year ago.

LIC has become the market leader with 15.5 per cent, still down from 16.8 per cent a year ago. ICICI Prudential has increased its share to 11.7 per cent from 11.7 per cent and SBI Life also gained to 11 per cent from 9.4 per cent a year ago.

The company's total premium income was 32,000 crore in 2020 of which 12,000 crore was new business premium and almost 21, 000 crore was renewal premium.

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