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ICICI Prudential Life Insurance Company Ltd. posted a flattish new business annual premium equivalent (1% YoY growth) in Q2 FY23 as strong growth in group protection and non-linked savings was offset by weak performance in unit linked insurance plans and group savings.
However, APE grew 10% YoY in H1 FY23 to Rs 35 billion. Value of new business grew 21% YoY to Rs 6.2 billion (8% beat), primarily driven by a 502 basis points YoY expansion in VNB margin to 31.1% in Q2 FY23.
For H1 FY23, VNB rose 25% YoY to Rs 10.9 billion; VNB margin also expanded 372 bps to 31.0%.
We marginally cut our APE estimates for FY23/24 but estimate ICICI Prudential Life to deliver 23% compound annual growth rate in VNB over FY22-24.
This will be driven by a combination of premium growth and slight improvement in margins, thereby enabling operating return on enterprise value at ~17% in FY24E.
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