ICICI Prudential Life reported a rise in their net profits to Rs 286.86 crore for this quarter as compared to Rs 284.64 crore in the same quarter last year.
Net premium earned is calculated after deducting the reinsurance from the gross premium earned in that quarter/year. Insurers purchase reinsurance to decrease the risk from their head. This helps them in protecting themselves against sudden happenings and thus limit their losses. This net premium earned had a year-on-year fall of more than 10% to Rs 5,551 crore as the company filed in their results ending this quarter.
| Q1 FY21 | Q4 FY20 | Q1 FY20 | QoQ% | YoY% | |
| Gross Premium Income(crore) | 572 | 1061 | 631 | -45% | -9.3% |
| Net Premium Income(crore) | 555 | 1047 | 620 | -47% | -10% |
| Profits(crore) | 288 | 178 | 285 | 61% | 0.9% |
On a bright side, asset under management registered a year-on-year rise of 3.6%, taking the total from 1,64,024 crore to Rs 1,70,006 crore.
MD & CEO NS Kannan said, “The Covid-19 pandemic has had an impact on the way consumers perceive life insurance and therefore protection products have seen increased demand. Customers trust us to help them achieve their long-term financial goals and, despite volatile markets, our assets under management grew by 3.6 per cent to Rs 1.7 trillion for the quarter ended June 2020.”
ICICI Prudential Life is the biggest private life insurance company in India in terms of market share. During the times of COVID -19, life insurance companies are facing more and more claims. Many analyst believe that the number of claims would only rise in the near future and many families will still be in the grief of their loved ones passing away. Also, the threat of catching the virus will be forcing them to stay at their home for the time being.
As people are focussing more towards their life and their health, products offered by life insurance companies are getting more attraction. VNB margin is calculated by dividing the Value of New Business by Annualized Premium Equivalent. It is an important measure to check the earnings of the insurer. A high VNB margin tells that that the company is performing well in terms of profitability. For example, if a company with 24% VNB margin underwrote new business premium worth Rs 1000, the expected profit of the company will be of Rs 240. More popularity and demand for insurance products has led to an increase in their VNB margin to 24.4% from 21% YoY.
