ICICI Prudential Life Insurance Company & ICICI Lombard General Insurance Company Q1 FY10 results announced

ICICI Prudential Life Insurance Company (ICICI Life) maintained its position as the largest private sector life insurer based on retail new business weighted received premium during April-May 2009. ICICI Life’s total premium in Q1-2010 was Rs. 2,844 crore (US$ 594 million). ICICI Life’s renewal premium increased by 35%, reflecting the long term sustainability of the business. New business annualized premium equivalent (APE) in Q1-2010 was Rs. 622 crore (US$ 130 million). ICICI

Life’s unaudited New Business Profit (NBP) in Q1-2010 was Rs. 118 crore (US$ 25 million). Due to customer acquisition costs, which are not amortised, and reserving for actuarial liability, ICICI Life’s statutory accounting results reduced the consolidated profit after tax of ICICI Bank by Rs. 27 crore (US$ 6 million) in Q1-20101 (compared to Rs. 238 crore (US$ 50 million) in Q1-2009). The expense ratio has decreased from 14.5% in Q1-2009 to 11.6% in Q1-2010. Assets held increased 60% from Rs. 26,967 crore (US$ 5.6 billion) at June 30, 2008 to Rs. 43,035 crore (US$ 9.0 billion) at June 30, 2009.

ICICI Lombard General Insurance Company (ICICI General) maintained its leadership in the private sector during April-May 2009. ICICI General’s premium in Q1-2010 was Rs. 878 crore (US$ 183 million). ICICI General’s profit after tax for Q1-2010 was Rs. 38 crore (US$ 8 million).

NOTE: Life insurance companies worldwide make accounting losses in initial years due to business set-up and customer acquisition costs in the initial years and reserving for actuarial liability. Further, in India, amortization of acquisition costs is not permitted. If properly priced, life insurance policies are profitable over the life of the policy, but at the time of sale, there is a loss on account of non-amortized expenses and commissions, generally termed as new business strain that emerges out of new business written during the year. New Business Profit (NBP) is an alternate measure of the underlying business profitability (as opposed to the statutory profit or loss) and relevant in the case of companies in their growth phase. NBP is the present value of the profits of the new business written during the year. It is based on standard economic and non-economic assumptions including risk discount rates, investment returns, mortality, expenses and persistency assumptions. Disclosure on economic assumptions is available in the annual report for the year ended March 31, 2009.

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(This is a press release from ICICI Bank)