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ICICI Prudential Life Insurance reported its standalone net profit for the July-September quarter of the current fiscal year with a decline of 28.5 per cent at Rs. 301 crores, due to new business strain. The net profit of the company for the corresponding quarter of the fiscal year 2017-18 was reported at Rs. 421 crores.
According to the company’s regulatory filings, The total income during the July-September quarter of the financial year 2018-19 fell to Rs. 8,990 crores from Rs. 9,540 crores. Profit after tax or the net profit decreased primarily on account of higher new business stress, the statement said.
The statement explained, the new business strain arises when the premium paid at the commencement of a contract is not sufficient to cover the initial expenses, including acquisition costs and any mathematical reserve that the company needs to set up at that point.
The premium income increased to Rs. 7,682 crores during the quarter under review as against Rs. 6,599 crores in the year-ago period. The net premium also surged to Rs. 7,601 crores as compared to Rs 6,540 crore a year ago.
“Despite volatile markets, the opportunities in both savings and protection continue to be robust for life insurers. We continue to remain firmly rooted on our journey of growing the Absolute Value of New Business (VNB) through our strategy of 4Ps: premium growth, protection, persistence and productivity,” N S Kannan, MD & CEO, ICICI Prudential Life Insurance stated.
