1. At a Glance
ICICI Prudential Life (CMP ₹661) is the marriage of a top-five private bank and a British insurer. Over FY21–25 it delivered 3% sales CAGR, 39% profit CAGR TTM, ROE ~10%, and trades at 80x EPS ₹8.2. Rangebound performance meets promoter muscle—just don’t expect fireworks.
2. Introduction with Hook
Ever felt like you’re paying rent for your own life? Welcome to the world of life insurance, where ICICI Prudential Life is the landlord. With a 51% anchor from ICICI Bank and 22% from UK’s Prudential Plc, this joint venture sells you peace of mind—at a premium. But does their stock deliver life-changing returns, or just a polite handshake?
3. Business Model (WTF Do They Even Do?)
- Underwrite Policies: Individual, group, pension, health—participating, non-participating, ULIPs.
- Distribution Muscle: 115k+ agents, bancassurance via ICICI Bank’s 5,500-branch network, brokers and digital channels.
- INV Management: Collect premiums, invest in bonds/equities, earn investment income (“other income” ₹572 Cr in FY25).
- Value Add: Riders, add-ons, VNB (Value of New Business)—metrics loved by life insurers.
4. Financials Overview – Profit, Margins, ROE, Growth
- Revenue (Premium + Other Income): ₹70,778 Cr in FY25 vs ₹89,683 Cr in FY24 (–21% TTM drop due to investment yield mix).
- Profit: ₹1,186 Cr in FY25 vs ₹851 Cr in FY24 (↑39% CAGR TTM).
- ROE/ROCE: 10.3%/11.8% in FY25—below banking peers but decent for life insurers.
- Margins: OPM ~2%, but combined ratio metrics aren’t meaningful; focus on VNB margin (~18% industry avg).
- Growth: 5-year profit CAGR ~2%, TTM profit spike from other income rebound.
5. Valuation – Is It Cheap, Meh, or Crack?
- EPS: ₹8.20 (FY25).
- Current P/E: 80.6×.
- Peer P/E Range: SBI Life 76×, HDFC Life 98×, Max Financial 164×.
- Fair Value Range:
- Conservative (70×): ₹8.2 × 70 = ₹574
- Bull (100×): ₹8.2 × 100 = ₹820
- Rationale: At ₹661, it sits in the middle. Not screaming “bargain,” but not demanding a loan to buy either.
6. What’s Cooking – News, Triggers, Drama
- IFSCA Registration: Set up international office in GIFT City—plays ULIPs to NRIs and corporates.
- GST Orders: Facing appeals on tax demands (~₹63 Lakh to ₹3.66 Cr); immaterial but headline grabbers.
- Product Push: Launch of digital term plans via ICICI Bank API integrations.
- Regulatory Watch: New IRDAI capital norms may tilt solvency ratios; watch debt levels.
7. Balance Sheet – How Much Debt, How Many Dreams?
- Equity & Reserves: ₹11,933 Cr total.
- Borrowings: Nil on standalone—life insurers fund with liabilities, not bank loans.
- Investments: ₹303,475 Cr in bonds/equities—duration risk baked in.
- Liabilities (Policyholder Funds): ₹314,239 Cr—big but expected.
8. Cash Flow – Sab Number Game Hai
- Operating CF: –₹9,413 Cr (FY25, timing quirks; premiums vs payouts).
- Investing CF: +₹6,875 Cr (redemptions > purchases).
- Financing CF: +₹1,422 Cr (dividend payout cycle).
- Net: –₹1,116 Cr (seasonal; IRDAI requires reserve build-up).
9. Ratios – Sexy or Stressy?
| Ratio | FY25 | Trend | Industry |
|---|---|---|---|
| ROE | 10.3% | ↗ from 9% | 12–15% |
| Combined Ratio¹ | ~97% | ↘ improved | <95% ideal |
| VNB Margin² | ~18% | ↔ stable | 15–20% |
| Solvency Ratio | 1.8× | ↘ regulatory min 1.5× | ≥1.5× |
¹Premium payouts + expenses ÷ premiums. ²Estimated.
10. P&L Breakdown – Show Me the Money
- Premiums Earned: ₹70 778 Cr
- Commission & Expenses: ~₹69 292 Cr (claims + admin).
- Other Income: ₹572 Cr (investment gains).
- Profit Before Tax: ₹1 582 Cr → PBT margin ~2.2%.
- Net Profit: ₹1 186 Cr (tax rate ~25%).
11. Peer Comparison – Who Else in the Game?
| Company | CMP (₹) | P/E | ROE | 1-yr Perf | Mar Cap (Cr) |
|---|---|---|---|---|---|
| SBI Life | 1 835 | 76× | 15% | +5% | 183 667 |
| HDFC Life | 759 | 98× | 11% | +2% | 163 541 |
| ICICI Pru | 661 | 80× | 10% | +1% | 95 520 |
| Max Financial | 1 567 | 164× | 7% | +10% | 54 102 |
ICICI Pru sits in the middle: not the cheapest, but less demanding than Max.
12. Miscellaneous – Shareholding, Promoters
- Promoters: ICICI Bank 51.1%, Prudential Plc 22%.
- FIIs / DIIs: ~13% / 9%.
- Public Float: ~17%.
- Key KMP: MD & CEO Sandeep Batra; CFO Nikhil Sawhney.
13. EduInvesting Verdict™
ICICI Prudential Life is a decent-for-India life insurer: solid backing, reasonable profitability, and a P/E that won’t give you heart palpitations. It’s neither bargain basmati nor basmati-inflated; call it jeera-rice—dependable, unexciting, but gets the job done.
Tags: ICICIPRULI, Life Insurance, IRDAI, VNB Margin, Bancassurance, FY25, EduInvesting
✍️ Written by Prashant | 📅 July 12, 2025
