28 January 2021
3QFY21 Results Update | Sector: Financials
ICICI Prudential Life Insurance
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
IPRU IN
1,435
716.6 / 9.9
538 / 222
0/-16/-20
1163
CMP: INR499
TP: INR575 (+15%)
Buy
Distribution, product diversity to drive premium growth / VNB
Non-linked Savings seeing strong traction
Financials & Valuations (INR b)
FY20 FY21E FY22E
Y/E MARCH
329 345 373
Net Premiums
21.9 23.2 24.7
Surplus / Deficit
10.7 11.9 13.6
Sh. holder's PAT
NBP growth unwtd (%) 20.5 -3.0 10.0
-2.9 -15.1 18.2
APE growth - (%)
8.0
4.4
8.3
Tot. Premium gr. (%)
21.7 26.1 27.1
VNB margin (%)
15.0 15.6 15.9
RoE (%)
6.5 21.0 14.8
RoEV (%)
1.5
2.1
2.4
Total AUMs (INRt)
16.0 15.7 19.3
VNB (INRb)
160 194 223
EV per share
Valuations
P/EV (x)
P/EVOP (x)
3.1
21.8
2.6
20.4
2.2
17.3
ICICI Prudential Life (IPRU) posted 14% YoY growth in new business
premium, led by a sharp rise in the single premium business. However, on
APE, new business declined 18% YoY, largely due to ULIP plunging 39% YoY
(strong trends reported on a sequential basis). Persistency rate improved in
13th/61st month by 60bp/50bp QoQ to 82.7%/58.0%. However, on a YoY
basis, it declined across cohorts (barring 61st month). Overall, persistency in
the Protection segment has improved sharply.
VNB margins moderated to 25.7% (26% in 9MFY21), led by moderation in
the Protection mix, but were supported by stronger trends in the Non-
linked segment. Overall, we estimate IPRU Life to deliver a ~22% CAGR in
VNB over FY21–23E, largely led by continued expansion in VNB margins to
~28%; operating RoEV would sustain at ~15% by FY23E.
Maintain BUY.
Gross premium income grew ~11% YoY, led by 81% YoY growth in single
premium, while first-year premium declined 27% YoY. Also, renewal
premium grew at a modest ~9% YoY. Overall, shareholders’ PAT in 3QFY21
was broadly flat YoY at ~INR3.1b (in-line).
Total APE declined 18% YoY in 3QFY21, led by 39% YoY decline in ULIP
(~21% sequential growth). The Protection business also declined 4% YoY.
However, the Non-linked business posted growth of 36% YoY, led by the
Annuity business. Overall, the share of ULIP declined to ~51% (v/s 65% in
FY20). The share of Protection also declined to 15.4% (17.8% in 9MFY21).
IPRU indicated stronger trends in Credit Life in the coming quarters.
VNB margins moderated to 25.7% (v/s 27.4% in 2QFY21) on a lower
Protection mix, but were supported by stronger trends in the Non-linked
segment. Absolute VNB for 3Q stood at INR4.3b (flat YoY). For 9MFY21,
absolute VNB stood at INR10.3b (~9% YoY decline); VNB margins came in at
26%.
Total operating expenses (incl. commissions) surged to 126% YoY; thus,
cost-to-total weighted received premium (TWRP) increased to 15.0% (14.6%
in 9MFY21 v/s 14.3% in 1HFY21). Also, in the Savings business, cost/TWRP
increased to 9.3% in 9MFY21 (v/s 8.8% in 1HFY21).
Persistency in the Protection segment has improved meaningfully. On a
sequential basis, it improved 60bp/50bp to 82.7%/58.0% in 13th/61st
month. However, on a YoY basis, it declined across cohorts (barring 61st
month).
On the distribution side, the share of the banca channel in total APE
declined to ~42% in 9MFY21 (v/s ~51% in FY20), while the share of the
agency channel improved to ~24% (v/s ~21% in FY20).
Total premium grows 11% YoY; persistency improves sequentially
Shareholding pattern (%)
As On
Dec-20 Sep-20
Promoter
73.5
73.5
DII
4.7
4.6
FII
16.3
15.8
Others
5.5
6.1
FII Includes depository receipts
Dec-19
75.0
5.5
13.3
6.2
Research Analyst: Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com) |
Himanshu Taluja
(Himanshu.Taluja@motilaloswal.com)
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com);
Yash Agarwal
(Yash.Agarwal@motilaloswal.com)
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Highlights from management commentary
IPRU has increased focus on the Non-PAR segment without increasing balance
sheet risk. Also, the Protection business is likely to grow faster than the Savings
business; expect the share of the Protection mix to increase to ~25% over 3–5
years.
Credit Life would see higher traction in the coming quarters as sharp recovery
continues in home loan disbursements.
Total claims settled on account of COVID-19 were INR3.4b for 9MFY21. Overall,
claims in 9MFY21 (including COVID-19 claims) were in line with liability
provisions.
Valuation and view
The Protection and Annuity segments are likely to see healthy growth and should
help drive VNB growth. We expect the ULIP business to revive from FY22E, and the
addition of new banca partners would further drive business trends. Also,
persistency trends in the Protection segment have improved sharply; expect further
recovery in the coming quarters, primarily as trends stabilize in the ULIP business.
We estimate IPRU to deliver a ~19% CAGR in new business APE and VNB growth at a
22% CAGR over FY21–23E – led by continued expansion in VNB margins to ~28%.
Operating RoEV, on the other hand, would sustain at ~15%.
Maintain Buy, with
Target Price of INR575 (2.4x Sep’22e EV and 18.5x Sep’22e EVOP).
Quarterly performance
Policy holder's A/c
(INR m)
FY20
2Q
80,647
6.1%
3,019
0.3%
19.0
4.0
1,655
21.1
211
3Q
81,310
8.7%
3,025
1.9%
20.4
4.3
1,720
20.9
207
4Q
104,751
4.2%
1,795
-31.3%
17.0
4.7
1,530
23.8
194
1Q
55,511
-10.6%
2,876
0.9%
8.2
2.0
1,700
24.4
205
FY21E
2Q
85,722
6.3%
3,032
0.5%
14.7
4.0
1,815
27.4
206
3Q
89,708
10.3%
3,056
1.0%
16.7
4.3
2,049
25.7
226
4QE
113,817
8.7%
2,982
66.1%
20.8
5.4
2,084
26.2
209
1Q
Net premium income 62,081
Growth (%)
14.2%
PAT
2,849
Growth (%)
1.2%
Key metrics (INR b)
New Business APE
14.7
VNB
3.1
AUM
1,640
Key Ratios (%)
VNB Margins (%)
21.0
Solvency ratio (%)
217
E:MOFSL Estimates
FY20
328,790
7.5%
10,687
-6.3%
71.1
16.0
1,530
21.7
194
FY21E
FY21E
3QE
(INR m)
A v/s E
0%
-2%
344,758 89,607
4.9% 10.2%
11,945 3,122
11.8% 3.2%
60.3
15.7
2,084
26.1
209
15.1
4.1
2,001
26.8
202
10%
5%
2%
28 January 2021
2
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Quarterly snapshot
Policyholder A/c (INR b)
Net premium
First year premium
Renewal premium
Single premium
Investment income
Total income
Total comm. & opex
Benefits paid
Total expenses
PBT
Surplus/(Deficit)
Shareholder A/c
Trf from policyhold. a/c
Investment Income
Total income
PAT
APE data
Savings APE
ULIP
Other Savings
- Non-Participating
- Group
Protection
Total APE
APE (% of total)
Savings APE (%)
ULIP
Other Savings
- Non-Participating
- Group
Protection
Distribution mix (%)
Banca
Agency
Direct
Corporate Agents
Group
Key Ratios (%)
Operating ratios
Commission (unwtd)
Opex (unwtd)
Total Cost (unwtd)
Solvency Ratio
Profitability ratios
VNB margins
Persistency ratios
13th Month
25th Month
61st Month
Key Metrics (INR b)
VNB
EV
AUM
1Q
54.4
12.6
37.5
5.1
23.2
78.7
8.7
29.4
75.4
3.3
3.0
2.5
1.4
3.9
2.8
12.8
11.1
1.7
1.5
0.2
1.1
14.0
91.8
79.8
12.0
10.7
1.4
8.2
55.6
21.8
11.7
6.5
4.4
2Q
76.0
18.4
51.0
7.4
12.3
88.3
10.5
35.0
86.0
2.3
2.0
1.5
1.4
2.9
3.0
18.3
16.6
1.7
1.5
0.2
1.5
19.8
92.3
83.8
8.5
7.5
1.1
7.7
56.7
22.3
11.9
5.1
4.1
FY19
3Q
74.8
16.4
50.1
9.2
10.5
86.5
9.5
33.2
82.9
3.5
3.3
2.7
1.4
4.0
3.0
17.7
15.5
2.2
1.9
0.3
2.0
19.6
90.1
78.9
11.2
9.5
1.7
9.9
57.0
20.5
11.2
5.6
5.7
FY20
4Q
100.6
22.4
67.1
12.2
56.2
160.5
12.8
44.9
156.2
4.3
4.1
4.2
2.2
6.5
2.6
22.0
18.9
3.1
2.6
0.5
2.6
24.6
89.4
76.7
12.7
10.5
2.2
10.6
54.3
22.0
12.8
6.4
4.5
1Q
62.1
12.7
40.4
10.2
19.9
84.3
9.1
36.4
79.8
4.5
4.2
3.7
1.4
5.1
2.8
12.6
10.5
2.1
1.6
0.5
2.1
14.7
85.4
71.2
14.3
11.0
3.3
14.6
52.4
21.2
12.8
6.8
6.8
2Q
80.6
17.2
52.4
12.3
-1.3
82.1
11.5
41.4
77.1
5.0
4.8
4.0
2.0
6.0
3.0
16.2
12.8
3.4
2.5
0.9
2.8
19.0
85.1
67.2
17.9
13.0
4.9
14.9
53.2
19.8
13.0
7.3
6.7
3Q
81.3
18.7
52.3
11.6
45.6
129.5
11.9
53.9
125.4
4.1
3.9
3.6
1.9
5.5
3.0
17.7
13.8
3.9
2.7
1.2
2.7
20.4
86.9
67.8
19.0
13.4
5.6
13.1
53.6
21.9
11.7
7.2
5.6
4Q
104.8
16.5
64.4
25.7
-189.4
-76.5
11.8
62.0
-86.1
9.6
9.0
8.6
1.3
9.9
1.8
16.2
10.7
5.5
5.6
-0.1
3.5
19.7
82.2
54.1
28.1
28.6
-0.5
17.8
44.3
21.7
13.0
8.2
12.8
1Q
55.5
6.3
41.4
9.8
130.7
190.6
7.0
26.0
184.0
6.5
6.3
6.5
1.3
7.7
2.9
6.1
3.6
2.5
2.0
0.5
2.1
8.2
74.0
43.6
30.4
24.4
6.0
26.0
39.6
24.6
12.3
8.6
14.9
FY21
2Q
85.7
11.7
57.7
17.9
79.5
168.4
9.9
49.1
162.6
5.7
5.4
4.5
1.7
6.2
3.0
12.3
7.0
5.3
4.4
0.9
2.3
14.7
84.2
47.8
36.3
30.1
6.2
15.8
43.8
22.7
12.2
8.6
12.8
3Q
89.7
13.6
56.8
21.1
192.8
285.5
10.9
68.2
281.2
4.3
4.0
4.1
2.1
6.2
3.1
14.1
8.5
5.6
4.9
0.8
2.6
16.7
84.6
50.7
33.9
29.2
4.7
15.4
42.0
25.1
13.2
7.7
12.0
Change (bp)
YoY
QoQ
10
5
-27
16
9
-2
81
18
323
143
121
70
-9
10
26
39
124
73
5
-25
5
-25
13
15
14
1
-10
26
0
1
-20
14
-39
21
45
6
78
10
-32
-14
-4
11
-18
14
Change (bp)
-232
41
-1,712
287
1,481
-246
1,577
-93
-96
-153
232
-41
-1,162
318
149
53
642
-180
243
105
-92
-76
5.5
12.0
17.5
234.6
17.5
85.8
77.8
54.0
2.4
NA
1427
5.6
9.4
15.0
234.3
17.4
85.2
77.8
54.8
3.5
192
1461
5.4
8.6
14.0
224.3
16.3
84.1
76.7
55.6
3.2
NA
1500
5.6
8.5
14.1
214.9
17.1
84.6
75.6
56.8
4.2
216
1604
5.1
11.9
17.0
216.7
21.0
84.4
75.7
57.3
3.1
NA
1640
5.6
10.6
16.2
210.6
21.1
83.6
75.0
57.2
4.0
227
1655
5.9
10.6
16.5
207.2
20.9
83.1
74.4
56.3
4.3
NA
1720
5.3
8.8
14.2
194.1
23.8
83.2
75.1
56.0
4.7
230
1530
4.2
10.5
14.8
205.1
24.4
81.8
73.4
56.8
2.0
NA
1700
4.9
9.0
13.9
205.5
27.4
82.1
73.0
57.5
4.0
257
1815
5.3
9.7
15.0
226.1
25.7
82.7
72.7
58.0
4.3
NA
2049
-60
-96
-156
1,890
479
-40
-170
170
0
NA
19
41
68
109
2,060
-168
60
-30
50
7
NA
13
Note: (a) Persistency ratios are excluding single premium and on cumulative basis for 1H, 9M and 12M
28 January 2021
3
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Highlights from management commentary
Business mix
Mortality experiences (including COVID-19 claims) are in line with provisions
made by the company.
Total claims settled on account of COVID-19 for 9MFY21 stood at INR3.4b.
Furthermore, additional provisions of INR1b toward COVID-19 have not been
utilized thus far.
Credit Life trends picked up during the quarter. Also, the company increased
focus on the Pension and Annuity segments. It is hedging its interest rates
through cash market instruments and derivative instruments (such as FRA and
long-term govt. bonds). Also, it expanded product tenure from a maximum of 15
years to 20 years.
Persistency in the Protection segment improved meaningfully.
ULIP is also showing gradual recovery trends.
Testing capacity is a challenge in the current COVID environment (supply-side
constraints), which affected Retail Protection trends in 3Q.
Overall, the Protection business would grow faster than the Savings business;
expect the share of the Protection mix to increase to ~25% over 3–5 years.
The attachment of critical illness in protection policies has also improved
meaningfully.
On the persistency front, the target is to reach last year’s levels.
Operating metrics
The company continues to target doubling FY19 VNB over 3–4 years.
It is seeing cost reduction in employee expenses, discretionary expenses, etc.
Non-PAR still comprises less than 1% of total liabilities.
Protection pricing has recently been increased by most players.
Distribution channel
The focus is on further diversifying the distribution network by adding new
banca partners; therefore, it has entered into partnerships with IDFCFB,
AUBANK, RBL, Phone Pe, NSDL, etc. It is also focusing on increasing the agency
channel.
ICICI Bank’s share in the total APE is 34%, with other banks contributing 8% to
the total APE.
ICICI Bank is very keen to cross-sell protection and annuity policies, while not
selling traditional policies.
28 January 2021
4
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Key exhibits
Exhibit 1: Protection mix stood at 15.4% of total APE
Linked
4%
1%
11%
Non-Linked
9%
2%
10%
Group
15%
3%
17%
84%
82%
Protection
13%
6%
13%
Exhibit 2: Margins stood at 26% as of 9MFY21
VNB Margin
Protection (%)
6%
1%
11%
15%
5%
29%
80%
65%
68%
51%
FY17
FY18
FY19
FY20
3Q20
3Q21
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 3: Total expense ratio stood at 15% as of 3QFY21
(v/s 13.9% in 2QFY21)
commission ratio (cal on wrp)
Opex ratio (cal on wrp)
Exhibit 4: Staff cost declined 16% YoY
Staff cost (INRm)
Growth (YoY, RHS)
Source: MOFSL, Company
Source: MOFSL, Company
Valuation and view
We believe India’s Life Insurance sector is in a sweet spot – wherein strong
structural potential now overlaps with the rising share of financial savings and
higher disposable incomes. Thus, we expect Indian insurers to trade at a
premium to global insurers.
Private sector life insurance companies have 50% market share in total new
business APE, and IPRU is among the leading players to post market share gains
across segments. Furthermore, the recent new banca tie-ups with several banks
are likely to aid faster new premium growth over the medium term.
Protection and Annuity are likely to do well in the current environment, driving
further margin expansion. Overall, we expect VNB margins to improve to ~28%
by FY23E.
Buy, with Target Price of INR575:
The
Protection and Annuity segments are
likely to see healthy growth and should help drive VNB growth. We expect the
ULIP business to revive from FY22E and the addition of new banca partners to
further aid business trends. Also, persistency trends in the Protection segment
have improved sharply; expect further recovery in the coming quarters, mainly
as trends stabilize in the ULIP business. We estimate IPRU to deliver a ~19%
5
28 January 2021
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
CAGR in new business APE and VNB growth at a 22% CAGR over FY21–23E – led
by continued expansion in VNB margins to ~28%. Operating RoEV, on the other
hand, would sustain at ~15%.
Maintain Buy, with Target Price of INR575 (2.4x
Sep’22e EV and 18.5x Sep’22e EVOP).
Exhibit 5: We marginally cut our VNB growth for FY22/FY23 by ~3%
Old Est.
FY21E
Technical Account (INR b)
Net Premiums
Investment income
Total income
Commission
Operating expenses
Surplus / Deficit
Shareholder's Account
Total Income
Total Expenses
PAT
Key Metrics
VNB (INR b)
EV (INR b)
Key Ratios
VNB margin (%)
Op. ROEV (%)
RoEV (%)
26.7
15.3
19.8
27.5
14.9
14.6
28.1
15.1
14.3
26.1
15.3
21.0
27.1
14.9
14.8
27.7
15.0
14.6
-2.3
-0.1
6.4
-1.3
-0.3
1.1
-1.5
-0.6
2.2
16.4
275.6
20.0
315.9
24.3
361.1
15.7
278.6
19.3
319.8
23.5
366.5
-4.3
1.1
-3.3
1.2
-3.4
1.5
27.9
14.9
12.5
31.0
14.4
16.1
33.4
14.0
18.8
27.3
14.9
11.9
28.5
14.4
13.6
30.4
14.0
15.8
-2.1
0.0
-4.5
-8.1
0.0
-15.2
-9.0
0.0
-15.5
347.2
134.8
494.3
20.1
33.0
23.9
377.0
138.5
529.7
21.9
35.6
27.7
418.9
159.4
594.5
24.6
39.3
33.4
344.8
134.8
491.8
19.9
32.7
23.2
373.4
138.6
526.2
21.7
35.2
24.7
413.8
159.6
589.8
24.3
38.8
29.7
-0.7
0.0
-0.5
-0.7
-0.8
-2.6
-1.0
0.1
-0.7
-1.0
-1.0
-10.6
-1.2
0.2
-0.8
-1.2
-1.2
-11.3
FY22E
FY23E
FY21E
Revised Est.
FY22E
FY23E
FY21E
Estimates Chg
FY22E
FY23E
Source: MOSL, Company
Story in charts
Exhibit 6: First-year premium declined 27% YoY
First Yr Premium
85%
45%
Tot. Premium
Exhibit 7: Share of single premium increased to 23%
First Year Premium
Renewal Premium
Single Premium
5%
-35%
-75%
Source: MOFSL, Company
Source: MOFSL, Company
28 January 2021
6
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Exhibit 8: Share of direct channel is improving
Banca
7%
9%
24%
7%
10%
24%
Agency
6%
12%
23%
Direct
5%
6%
12%
22%
corp agents
8%
7%
13%
21%
15%
9%
12%
25%
58%
57%
57%
52%
56%
51%
40%
Group
13%
9%
12%
23%
12%
8%
13%
25%
Exhibit 9: Share of ULIP in total APE stood at 51%
Total APE (INRb)
85%
79% 80% 84% 79% 77%
ULIP (as a % of total APE)
71% 67% 68%
54%
51%
44% 48%
3%
6%
14%
25%
44%
42%
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 10: Sequential improvement in 13
th
/61
st
month
persistency
13th Month
25th Month
61st Month
Exhibit 11: Solvency ratio improved to 226%, well above the
regulatory requirement of 150%
Solvency ratio
Regulatory requirement (RHS)
Source: MOFSL, Company
Source: MOFSL, Company
28 January 2021
7
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Financials and valuations
Technical account (INR b)
Gross Premiums
Net Premiums
Income from Investments
Total income (A)
Commission
Operating expenses
Total commission and opex
Benefits Paid (Net)
Chg in reserves
Total expenses (B)
(A) - (B)
Prov for Tax
Surplus / Deficit
Shareholder's a/c (INR b)
Transfer from technical a/c
Income From Investments
Total Income
Total Expenses
PBT
Prov for Tax
PAT
Growth
Premium (INR b) & growth (%)
NBP - unweighted
NBP - wrp
Renewal premium
Total premium - unweighted
NBP growth - unweighted
NBP growth - wrp
Renewal premium growth
Tot. premium growth - unweighted
Premium mix (%)
New business - un-wtd
- Individual mix
- Group mix
New business mix - APE
- Participating
- Non-participating
- ULIPs
Total premium mix - un-wtd
- Participating
- Non-participating
- ULIPs
Indi. Premium sourcing mix (%)
Individual agents
Corporate agents-Banks
Direct business
Others
11.7%
13.6%
74.8%
FY17
23.5%
57.1%
12.8%
6.6%
12.0%
12.8%
75.2%
FY18
25.6%
52.6%
16.0%
5.8%
11.4%
15.2%
73.4%
FY19
21.8%
55.2%
16.7%
6.3%
12.2%
17.6%
70.2%
FY20
21.9%
49.7%
20.1%
8.3%
11.0%
27.9%
61.1%
FY21E
22.9%
49.5%
22.0%
5.6%
11.0%
29.1%
60.0%
FY22E
23.9%
49.3%
21.8%
5.0%
11.2%
30.1%
58.7%
FY23E
24.9%
49.1%
21.6%
4.4%
9.5%
4.8%
85.7%
10.6%
5.0%
84.4%
9.0%
9.0%
82.0%
12.5%
18.3%
69.2%
12.5%
22.5%
65.0%
11.8%
24.9%
63.3%
13.2%
27.7%
59.1%
88.7%
11.3%
91.2%
8.8%
78.5%
21.5%
63.1%
36.9%
70.0%
30.0%
75.0%
25.0%
76.0%
24.0%
FY17
223.5
221.6
149.8
371.9
7.6
23.6
31.2
150.0
175.0
360.4
11.5
0.8
10.7
FY17
11.3
6.7
18.3
0.4
17.8
1.0
16.8
2%
FY17
78.6
65.0
144.9
223.5
16.2%
27.2%
16.9%
16.6%
FY17
FY18
270.7
268.1
112.6
382.2
14.0
20.3
34.3
172.8
154.5
367.3
14.8
1.2
13.6
FY18
10.9
7.4
18.4
1.2
17.2
1.0
16.2
-4%
FY18
92.1
75.4
178.6
270.7
17.1%
16.1%
23.2%
21.1%
FY18
FY19
309.3
305.8
102.1
414.0
15.5
26.1
41.6
142.6
210.0
400.5
13.4
1.1
12.3
FY19
10.8
6.4
17.3
5.6
11.6
0.2
11.4
-30%
FY19
103.6
73.2
205.7
309.3
12.5%
-3.0%
15.2%
14.3%
FY19
FY20
334.3
328.8
(125.2)
219.4
15.9
28.5
44.3
193.8
(50.6)
196.2
23.2
1.3
21.9
FY21E
349.0
344.8
134.8
491.8
19.9
32.7
52.7
179.2
227.6
467.2
24.6
1.4
23.2
FY21E
20.9
6.4
27.3
14.9
12.4
0.4
11.9
12%
FY21E
121.1
60.3
227.8
349.0
-3.0%
-15.1%
8.8%
4.4%
FY21E
FY22E
378.0
373.4
138.6
526.2
21.7
35.2
57.0
200.0
234.4
499.8
26.4
1.7
24.7
FY22E
21.9
6.6
28.5
14.4
14.1
0.5
13.6
14%
FY22E
133
71
245
378
10.0%
18.2%
7.4%
8.3%
FY22E
FY23E
419.1
413.8
159.6
589.8
24.3
38.8
63.0
209.8
276.0
558.2
31.6
1.9
29.7
FY23E
26.0
4.4
30.4
14.0
16.4
0.6
15.8
16%
FY23E
153
85
266
419
15.0%
18.9%
8.6%
10.9%
FY23E
7%
FY20
19.9
6.6
26.5
15.8
10.7
-
10.7
-6%
FY20
124.9
71.1
209.4
334.3
20.5%
-2.9%
1.8%
8.0%
FY20
28 January 2021
8
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Financials and valuations
Balance sheet (INR b)
Sources of Fund
Shareholders' Fund
Policy Liabilities
Prov. for Linked Liab.
Total
Application of Funds
Shareholders’ inv
Policyholders’ inv
Assets to cover linked liab.
Current assets
Total
Operating ratios (%)
Investment yield (%)
Commissions / GWP
- first year premiums
- renewal premiums
- single premiums
Operating expenses / GWP
Total expense ratio
Claims / NWP
Solvency margin
Persistency ratios (%)
13th Month
25th Month
37th Month
49th Month
61st Month
Profitability ratios
VNB margin (%)
RoE (%)
RoIC (%)
Operating ROEV (%)
RoEV (%)
Valuation ratios
Total AUMs (INRb)
- Of which equity AUMs (%)
Dividend (%)
Dividend payout ratio (%)
EPS (INR)
VNB (INRb)
EV (INRb)
EV/Per share
VIF as % of EV
P/VIF
P/AUM (%)
P/EV (x)
P/EPS (x)
P/EVOP (x)
66.3
270.7
878.8
28.7
1,247.4
FY17
13.0%
3.4%
7.3%
2.0%
0.6%
10.5%
13.9%
67.7%
289%
FY17
85.7%
73.9%
66.8%
59.3%
56.2%
FY17
10.1%
28.7%
34.8%
16.4%
16.0%
FY17
1,229.2
47%
38%
40%
11.7
6.6
161.7
112.7
58%
7.6
58%
4.4
42.5
31.4
77.5
332.9
975.0
27.1
1,418.2
FY18
8.6%
5.2%
13.9%
1.9%
1.9%
7.5%
12.7%
64.5%
252%
FY18
86.8%
78.3%
68.8%
64.2%
54.5%
FY18
16.5%
24.4%
33.4%
22.8%
16.1%
FY18
1,395.3
48%
69%
74%
11.3
12.9
187.8
130.8
63%
6.1
51%
3.8
44.2
19.5
79.9
400.7
1,109.5
33.4
1,630.9
FY19
6.8%
5.0%
16.0%
1.9%
1.4%
8.4%
13.4%
46.6%
215%
FY19
86.2%
77.4%
71.0%
65.0%
58.1%
FY19
17.0%
16.4%
23.5%
20.2%
15.1%
FY19
1,604.1
48%
49%
74%
8.0
13.3
216.1
150.6
66%
5.0
45%
3.3
62.8
18.9
74.2
467.5
970.8
38.4
1,560.4
FY20
-8.7%
4.7%
16.5%
1.8%
1.1%
8.5%
13.3%
58.9%
194%
FY20
85.3%
77.4%
69.0%
66.4%
57.4%
FY20
21.7%
15.0%
22.0%
15.2%
6.5%
FY20
1,529.7
40%
24%
38%
7.4
16.0
230.2
160.4
66%
4.7
47%
3.1
67.0
21.8
79.4
628.5
1,058.2
40.9
1,817.7
FY21E
8.0%
5.7%
28.2%
1.8%
1.1%
9.4%
15.1%
52.0%
209%
FY21E
84.8%
76.7%
69.0%
65.0%
58.5%
FY21E
26.1%
15.6%
24.6%
15.3%
21.0%
FY21E
2,084.1
43%
18%
25%
8.3
15.7
278.6
194.1
69%
3.7
34%
2.6
60.0
20.4
85.0
789.5
1,153.5
43.5
2,083.6
FY22E
7.1%
5.7%
25.7%
1.8%
1.1%
9.3%
15.1%
53.6%
204%
FY22E
84.9%
76.7%
69.5%
65.0%
60.1%
FY22E
27.1%
15.9%
28.1%
14.9%
14.8%
FY22E
2,352.4
45%
20%
25%
9.5
19.3
319.8
222.8
70%
3.2
30%
2.2
52.5
17.3
90.9
987.2
1,257.3
46.4
2,395.6
FY23E
7.1%
5.8%
24.2%
1.8%
1.1%
9.2%
15.0%
50.7%
200%
FY23E
85.5%
77.3%
70.3%
65.7%
61.9%
FY23E
27.7%
16.4%
32.6%
15.0%
14.6%
FY23E
2,662.4
46%
22%
23%
11.0
23.5
366.5
255.3
70%
2.8
27%
2.0
45.2
15.0
64.1
251.7
839.4
1,247.4
68.8
309.9
923.1
1,418.2
70.4
385.5
1,037.0
1,630.9
72.2
473.6
880.4
1,560.4
80.8
626.6
1,058.2
1,817.7
90.6
777.4
1,153.5
2,083.6
102.3
962.0
1,257.3
2,395.6
FY17
FY18
FY19
FY20
FY21E
FY22E
FY23E
28 January 2021
9
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
NOTES
28 January 2021
10
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
< - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30
days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the Regulations,
is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOFSL is a subsidiary
company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on www.motilaloswal.com. MOFSL
(erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of
India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its
stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member
of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance
products.
Details
of
associate
entities
of
Motilal
Oswal
Financial
Services
Limited
are
available
on
the
website
at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and buy or sell
the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a
market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of
interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the
analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there might exist an inherent conflict of interest in
some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should be aware
that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment
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https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and
Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity
and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use
would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities
and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal
Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report
is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is only available to
professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer
or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934
Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by
MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as
defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on
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only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a
chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be
executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered
broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading
securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services
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Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
The associates of MOFSL may have:
-
financial interest in the subject company
-
actual/beneficial ownership of 1% or more securities in the subject company
-
received compensation/other benefits from the subject company in the past 12 months
28 January 2021
11
 Motilal Oswal Financial Services
ICICI Prudential Life Insurance
-
-
-
-
other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific
recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there
might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies)
discussed herein or act as an advisor or lender/borrower to such company(ies)
received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
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demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from clients which are not
considered in above disclosures.
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or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is
already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the
views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or
published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any
locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOFSL to any registration or
licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose
possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or representatives shall be
liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not
to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses,
costs, damages,
expenses that may be suffered by the person accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website
www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai-
400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI:
ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration
No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.:
INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond,
NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered
through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory services is backed by proper research. Please read the Risk
Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in securities market is subject to market risk,
read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company Law
Tribunal, Mumbai Bench.
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