India's ICICI Life posts key quarterly margin below estimates, shares slide
- ICICI Life saw profit rise, yet shares dipped on unexpected margin declines, signaling a strategic pivot to growth
BENGALURU: India’s ICICI Life Insurance reported new business margins below expectations on Tuesday, sending shares sliding 3%, while second-quarter profit jumped 25% year-on-year.
Its value of new business (VNB), which measures the expected profit from new policies sold, rose 24.7% on-quarter to 7.12 billion rupees.
However, its VNB margin fell to 25.4% from 26.7% in the previous quarter, according to a Reuters calculation, with the shift towards higher-margin insurance products to help offset pressure from the loss of tax benefits not occurring as expected.
Instead, the company’s share of higher-margin protection policies fell sequentially, while that of market-linked policies rose.
At least five brokerages, including Systematix and Elara, had expected VNB margin between 25.5% and 26.5%.
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Analysts expect the life insurance sector’s growth to moderate for the rest of fiscal 2027, following a surge in policy sales after the Indian government cut consumption taxes on individual life insurance premiums late last year.
Growth focus
ICICI Life, the first major Indian life insurer to report September-quarter results, had shifted its focus towards growth over the past few quarters after prioritising margin expansion.
The company’s profit grew to 3.74 billion rupees ($39.28 million) from 2.99 billion rupees a year earlier.
Its net premium income rose 16.6% to 138.04 billion rupees in the September quarter.
Annualised premium equivalent (APE) sales, a key measure of new business, rose 15.6% to 27.99 billion rupees, according to a Reuters calculation. This compared with 14.6% growth in the previous quarter and a 3% decline a year earlier.
Peer HDFC Life will report its September-quarter results on Thursday.
Earlier this month, ICICI Life announced the appointment of Sidharatha Mishra as managing director and CEO, effective Wednesday, following Anup Bagchi’s resignation to take over as HDFC Bank CEO.