ICICI Prudential Life Insurance Company Tuesday reported a decline of 28.5 per cent in its standalone net profit to Rs 301 crore for second quarter ended September this fiscal due to new business strain.
The company's net profit in the same quarter of 2017-18 was at Rs 421 crore.
Profit after tax or the net profit decreased primarily on account of higher new business stress, it said.
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, it explained.
The total income during July-September 2018-19 also fell to Rs 8,990 crore from Rs 9,540 crore, the company said in a regulatory filing.
The premium income was, however, up at Rs 7,682 crore during the September quarter as against Rs 6,599 crore in the year-ago period. The net premium also rose to Rs 7,601 crore as compared to Rs 6,540 crore a year ago.
ICICI Prudential Life said that its Value of New Business (VNB) increased by 41.5 per cent Rs 590 crore in second half of 2018-19 from Rs 417 crore first half of preceding fiscal.
N S Kannan, MD & CEO, ICICI Prudential Life Insurance said: "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, persistency and productivity".
Shares of ICICI Prudential Life Insurance Company closed 2.17 per cent higher at Rs 323.20 on BSE.
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