ICICI Prudential Life Insurance share price drops 10% after Q3 earnings

ICICI Prudential Life Insurance share price cracked almost 10 per cent in early trade on BSE on Thursday, January 18, a day after the company announced its December quarter (Q3FY24) earnings. ICICI Prudential Life Insurance share price opened at ₹464.90 against the previous close of ₹515 and soon plunged to hit its 10 per cent lower circuit of ₹463.50. ICICI Prudential share price traded 7.52 per cent lower at ₹476.25 around 9:40 am.

ICICI Prudential Life Insurance on Wednesday reported an almost flat net profit of ₹227 crore for the third quarter ended December 2023. The company posted a profit of ₹221 crore in the same quarter a year ago.

The company's net premium income for the quarter increased nearly 5 per cent to ₹9,929 crore, as against ₹9,465 crore in the same period a year ago.

Also Read: ICICI Prudential Q3 results: Net profit flat at ₹227 crore

The assets under management of the company increased to ₹2,86,676 crore as against ₹2,51,884 crore at the end of the third quarter of the previous fiscal, it said.

ICICI Prudential said the value of new business (VNB) for nine months of FY24 (9M-FY24) was ₹1,451 crore. With an APE (annual premium equivalent ) of ₹5430 crore for the 9M-FY24, the VNB margin for 9M-FY24 stood at 26.7 per cent.

The decline in VNB margin is primarily on account of the shift in the underlying product mix from non-participating business to unit-linked and participating business, decline in group term business and higher expense ratio for the current year, the company said.

Brokerage firm Motilal Oswal Financial Services observed that the company's VNB margin is lower than estimated due to an adverse product mix.

The brokerage firm believes the growth in the non-ICICI Bank channel and agency channel is likely to pick up as the base effect kicks in. The increase in agent recruitment and the strong pace of new partnership additions are likely to aid premium growth.

Further, the brokerage firm added that the strategy of approaching customers with a wider product bouquet through all channels will also boost premium growth. Persistency has also improved in most cohorts.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.