ICICI Prudential's premium growth improves in June; bank channel still lags

livemint.com:

₹626 crore. Similarly, retail APE witnessed a 12% y-o-y growth, bolstered by the firm's diversified distribution channels beyond ICICI Bank. Over recent years, ICICI Prudential has made conscious efforts to expand its distribution network by collaborating with multiple banks and enlarging its agency network.

This shift comes as ICICI Bank primarily sold specific ICICI Prudential products, which had hampered the insurer's overall APE growth. APE from ICICI Bank has continued to decline but a slower pace, with a 14% y-o-y drop in June compared to 36% in May. This bodes well for investor sentiment and as such growth in this segment is a key monitorable.

Analysts, however, anticipate limited downside from the ICICI Bank channel and predict improved growth from H2FY24 onwards. The ICICI Bank channel contributed approximately 14% of the APE distribution mix as of FY23. As such, the change in the company’s management, bottoming of ICICI Bank channel decline and improvement in other distribution channels, may augur well for the company’s prospects.

“A combination of expansion of distribution network (increase in advisor count by more than 33K to 200K, expansion in banca partnerships by 13 to 39 banks) as well as initiatives to improve agents‘ productivity should improve growth," said analysts from Jefferies India in a 7 July report. Investors appear optimistic what with the stock rising about 30% so far in calendar year 2023. However, the high base of FY23 means growth can be subdued in FY24.