ICICI Prudential Q3 net profit up 1.3% at Rs 306 cr on higher tax outgo

Leading private sector life insurer ICICI Prudential on Wednesday reported a marginal 1.3 per cent growth in net profit at Rs 306 crore for the three months to December on higher tax outgo, which whittled down the massive investment gains.

But the management said the higher tax outgo was expected following changes in the dividend distribution tax last year.

New business premium grew 14 per cent to Rs 2,04,872 crore-mark, helping improve its market share among private sector players to 13 per cent.

Given the massive market rally, it booked Rs 40,756 crore gains from the market during the nine-month period ended December 2020 as against Rs 6,781 crore in the same period last fiscal.

For the reporting quarter, the market gains stood at Rs 19,491 crore as against Rs 4,744 crore in the corresponding quarter last fiscal.

Value of new business for the quarter stood at Rs 428 crore with an expansion in its margin to 25.7 per cent from 20.9 per cent.

In the reporting quarter, underwriting profit rose just 4.7 per cent to Rs 135 crore. In the year-ago period, the same was at Rs 129 crore.

"The higher tax outgo at around Rs 22 crore was expected due to the changes in the dividend distribution tax effected last year. Even higher net claims of Rs 150 crore (as against gross claims of Rs 350 crore) were for the first nine months of the fiscal from the coronavirus pandemic was also expected.

"Moreover, we also have a Rs 100-crore additional provision made for the pandemic claims already. As far as we are concerned claims have already peaked in September-October," the company's Managing Director and Chief Executive N S Kannan told PTI.

The commission paid to the agents which is based on products, came down to Rs 386 crore in the latest December quarter from Rs 443 crore and so did total expenses which declined from Rs 929 crore to Rs 890 crore.

The company scaled a significant milestone in the reporting quarter with the assets under management crossing the Rs 2 lakh crore mark, rising 34 per cent compared to the year-ago period.

Kannan said their resilient balance sheet provides a strong foundation with zero NPAs since inception, robust risk management strategies and a strong solvency ratio of 226 per cent.

Crediting the good set of numbers to a robust product strategy, Kannan said this has helped them capitalise on the opportunities in the emerging environment without compromising on risk management.

During the latest December quarter, traditional long-term saving products grew 36 per cent and annuity products rose at a robust 125 per cent and the market leading protection plans helped its increase the protection mix from 14.1 per cent to 17.8 per cent.

Kannan also credited better sales to the tie-ups with banks such as AU Small Finance Bank and RBL Bank to add onto the existing tie-ups with its parent and Indusind and IDFC First Bank.

Currently, bancassurance brings in 42 per cent of its sales and agents 34 per cent and direct sales or online 12.6 per cent, Kannan said, adding that of the total bancassurance sales as much as 43 per cent come from ICICI Bank branches alone.

The company counter closed marginally down at Rs 499.35 on the BSE while the Sensex tanked 2 per cent.