Leadership in life insurance
May 2014
22
Industry overview and outlook
Performance update
Our strategy
Agenda
3
Agenda
3
Industry overview and outlook
Performance update
Our strategy
Total premium (` bn)
Penetration (as a % to
GDP)
New business premium1
(` bn)
Number of players
Insurance premium per
capita (`)
FY2013
24
470
2,872
~2,235
FY2002
12
116
501
~2.1%
~460
28.7%
26.1%
Source: IRDA, Life insurance council, Company estimates
India life insurance growth story
Asset under
management (` bn)
~17,687~2,30424.3%
1. Retail weighted premium
FY2008
18
527
2,014
~1,680
~8,477
-2.2%
7.4%
15.8%
4
~4.0% ~2.8%
Source: UN Population division‘s release: ‘World Population Prospects-
The 2012 Revision’
Fuelled by favourable demographics..
Increase in target population with rising income levels
Population of age > 25 years (in mn)
5
613
755
888
-
100
200
300
400
500
600
700
800
900
1,000
2010 2020E 2030E
..High household savings
Financial year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Financial savings
/GDP10.5% 10.0% 11.0% 10.1% 11.9% 11.3% 11.6% 10.1% 12.0% 9.9% 7.0% 7.1%
Household
savings / GDP23.2% 22.3% 23.2% 23.6% 23.5% 23.2% 22.4% 23.6% 25.2% 23.1% 22.8% 21.9%
Source: RBI, CSO
6
2.98 3.11 3.44 4.36 4.31
5.10 5.38
7.60 8.56
10.26
14.23 14.95
2.47 2.53 3.13
3.28 4.38
4.84 5.80
5.71
7.75
7.74
6.32
7.17
0
5
10
15
20
25
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
` trillio
n
Physical savings Financial saving
Share of life insurance in financial savings
Distribution of financial assets
14.4%16.4%
Source: RBI
7
Insurance market size
Significant opportunity at current savings rate
Household savings
Insurance
FY
2008
1.70
Gross financial
savings
Nominal GDP
FY
2020E*
4.78
59.51
29.18
269.15
FY
2002
0.41
23.48
15%
CAGR
49.87
5.45
2.86
11.18
7.72
FY
2013
1.80
101.13
22.12
10.97
27%
CAGR
13%
CAGR
13%
CAGR
18%
CAGR
1%
CAGR
15%
CAGR
15%
CAGR
7%
CAGR
Amounts in ` trillion
15%
CAGR
15%
CAGR
15%
CAGR
Source: RBI, CSO
*Company estimates8
Industry: New business premium1
1. Retail weighted new business premium
Source : IRDA
`b
n
9
Growth FY2009 FY2010 FY2011 FY2012 FY2013 FY2014
Private 1.1% 7.1% -20.0% -23.9% 1.9% -3.4%
LIC -22.2% 29.3% 4.3% 11.2% -4.1% -3.4%
Industry -10.4% 16.7% -8.5% -4.8% -1.9% -3.4%
57.0%
52.3%
45.7%
36.5%
38.0%
38.0%
0%
10%
20%
30%
40%
50%
60%
0
50
100
150
200
250
300
350
FY2009 FY2010 FY2011 FY2012 FY2013 FY2014
LIC Private Private market share
Channel mix1
Industry
1. Individual new business premium basis
Source: IRDA , Public disclosures
Private players
10
51%47%
44%40% 41%
25% 33% 39%43% 42%
24%20%
17% 17% 17%
FY2010 FY2011 FY2012 FY2013 9M-FY2014
Agency Banca Others
80% 79% 79% 78% 80%
11% 13% 15% 16%14%
10% 8% 6% 6% 6%
FY2010 FY2011 FY2012 FY2013 9M-FY2014
Agency Banca Others
Product mix1
Industry Private players
1. New business premium basis
Source: IRDA, Life insurance council 11
17%
31%
59%
65%
72%
83%
69%
41%
35%
28%
FY 2010 FY 2011 FY 2012 FY 2013 9m-FY2014
Traditional ULIP
45%
58%
85%90%
94%
55%
42%
15%10%
6%
FY 2010 FY 2011 FY 2012 FY 2013 9M-FY2014
Traditional ULIP
Agenda
Industry overview and outlook
Performance update
Our strategy
12
Profit after tax
Solvency ratio (%)
Assets under management
Retail new business premium 34.20
Retail renewal premium
Group premium
Total premium
Retail weighted received premium
APE
New Business Profit (NBP)1
34.32
80.55 81.00
20.63 8.97
135.38 124.29
33.10 32.53
35.32 34.44
5.29 4.27
14.96 15.67
396 372
741.64 805.97
FY2014FY2013` bn
1. Traditional Embedded Value basis, on medium term expense targets,
post-tax basis
Performance snapshot
13
14
Agenda
14
Industry overview and outlook
Performance update
Our strategy
Key strategic objective: Profitable growth
Enhance market leadership
Provide superior value proposition to customers
Strengthen multichannel distribution architecture
Improve cost efficiency
Improve persistency and control surrenders
Target superior risk adjusted fund performance
15
Robust risk management and control framework
Consistent leadership1
1
3
4
5
2
FY2010FY2006 FY2012
6
FY2013
1. Retail weighted received premium (RWRP) basis
16
FY2002 FY2008 FY2014
Market share1
17
1. Retail weighted received premium (RWRP) basis
7.3%
5.9%
7.0% 7.2%
16.0% 16.1%
18.5%18.9%
0%
5%
10%
15%
20%
25%
FY2011 FY2012 FY2013 FY2014
Total Private
Product mix1
1. Retail weighted received premium (RWRP) basis
Balanced mix to cater to all customer segments
18
12.5%
38.4%
45.5%
33.5%
87.5%
61.6%
54.5%
66.5%
0%
50%
100%
FY2011 FY2012 FY2013 FY2014
Ulip
Traditional
Distribution mix1
Multi channel distribution architecture to optimize reach and efficiency
19
1. Retail weighted received premium (RWRP) basis
55.4%
45.3%
35.4%29.0%
21.4%37.6%
44.9%54.6%
16.4%10.3% 13.1% 9.6%
6.7% 6.7% 6.5% 6.8%
0%
50%
100%
FY2011 FY2012 FY2013 FY2014
Agency Banca CABR Others
Cost efficiency
Cost: All insurance expenses including commission
Expense ratio: All insurance expenses (excl. commission) / (Total premium – 90% of single premium)
Commission ratio: Commissions / (Total premium – 90% of single premium)
Total Expense ratio: All insurance expenses (incl. commission) / (Total premium – 90% of single premium)
20
Ratios FY2011 FY2012 FY2013 FY2014
Cost to RWRP 69.2% 84.8% 75.4% 69.3%
Expense ratio (excl. commission) 12.5% 13.4% 13.3% 13.6%
Commission ratio 3.5% 4.6% 5.9% 5.2%
Total expense ratio 16.0% 17.9% 19.2% 18.8%
24.96
19.8917.83 17.31 16.28
5.61
6.05 7.65
6.27
0
5
10
15
20
25
30
FY2011 FY2012 FY2013 FY2014
` b
n
Expenses
Commission
Non-Commission
25.50
22.55
23.88
Customer retention
13th
month persistency
1. Average monthly retail surrenders
Surrenders1 as % of average AUM
21
75.8%77.0%
71.4% 71.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
FY2011 FY2012 FY2013 FY2014
1.3%
0.9%
1.3%
1.1%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
FY2011 FY2012 FY2013 FY2014
Customer service
80.2% of the new business applications initiated
using the digital platform
41.6% of renewal premium payment through
electronic modes
70.0% of all service transactions processed through
website and IVRS
90.5% of payouts through electronic mode
Grievance ratio1
stood at 253
Claims settlement ratio2
for FY2014: 94.1%
Average claim settlement time3
was 6 days
1. Grievance ratio: grievances per 10,000 polices
2. Claims ratio: No of claims settled/ no of claims intimated
3. Time for non investigation cases22
707.71
2323
Assets under management
Among the largest domestic fund managers
805.97
741.64
248.25 308.81
364.10 423.70
433.25
398.90
377.54
382.26
0
100
200
300
400
500
600
700
800
900
FY2011 FY2012 FY2013 FY2014
Debt Equity
681.50
Fund performance
Inception Dates:
Preserver Fund: June 28, 2004 Protector Fund: April 2, 2002
Balancer Fund : April 2, 2002 Maximiser Fund: Nov 19, 2001
97% of the funds have outperformed benchmark since inception*
* As on March 31, 2014
Fund performance since inception*
24
6.8%6.1%
10.2%
16.3%
8.1%
7.1%
11.8%
19.0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Preserver Protector Balancer Maximiser
Benchmark Fund
25
Safe harbor
Except for the historical information contained herein, statements in this release
which contain words or phrases such as 'will', 'would', ‘indicating’, ‘expected to’
etc., and similar expressions or variations of such expressions may constitute
'forward-looking statements'. These forward-looking statements involve a number
of risks, uncertainties and other factors that could cause actual results to differ
materially from those suggested by the forward-looking statements. These risks
and uncertainties include, but are not limited to our ability to successfully
implement our strategy, our growth and expansion in business, the impact of any
acquisitions, technological implementation and changes, the actual growth in
demand for insurance products and services, investment income, cash flow
projections, our exposure to market risks, policies and actions of regulatory
authorities; impact of competition; experience with regard to mortality and
morbidity trends, lapse rates and policy renewal rates; the impact of changes in
capital , solvency or accounting standards , tax and other legislations and
regulations in the jurisdictions as well as other risks detailed in the reports filed by
ICICI Bank Limited, our holding company, with the United States Securities and
Exchange Commission. ICICI Bank and we undertake no obligation to update
forward-looking statements to reflect events or circumstances after the date
thereof.
Thank you