ICICI Prudential Life Insurance increases capital by Rs 230 crore

Mumbai, Jan 8 (UNI) ICICI Prudential Life Insurance Company has increased its capital by Rs 230 crore, taking the total capital investment by the promoters to Rs 1,815 crore.

This is the third equity hike during this financial year, taking the capital infusion during the year to Rs 630 crore, said a ICICI Pru press release.

The two partners, ICICI Bank and Prudential plc, contributed to the capital in their existing proportions of 74:26 respectively.

ICICI Prudential continues to have the largest capital base amongst all life insurers in the country. For consumers, this large capital base is one of the most important indicators of its solvency and ability to meet all its policyholder commitments. In fact, this capital strength was one of the key factors taken into account when ICICI Prudential was assigned a National Insurer Financial Strength rating of AAA (Ind), the highest possible rating from Fitch Ratings last year.

According to ICICI Prudential Life Insurance Company Managing Director and CEO Ms Shikha Sharma, the additional capital will be used to meet the solvency norms as stipulated by the regulator, and will fund the high up-front expenses typical to a life insurance business.

This infusion also assumes significance in the context of the company's expansion strategy, which includes opening new offices across the country, she added.

Fresh capital infusion is a necessity to sustain the growth of a life insurance business in its early years. This is because a number of expenses are incurred up-front, but the revenue, in the form of premia, flows over a 10-15 year time frame. Hence additional capital is vital to meet the solvency margins and also serves as an assurance to policyholders about the ability of the company to meet its commitments.

The size and scale of the business, as it stands today is an important success factor for ICICI Prudential and the company will continue on its expansion plan in the months and years to come.

As of November 30, 2006, the company had a network of 415 branches and over 146,000 advisors.

In the period of April-November 2006, the company grew 100 per cent over the same period in the previous year, to notch up a new business weighted premium of over Rs 2,279 crore.

Its weighted premium market share amongst private life insurers stood at 30.2 per cent for the period, ensuring that it continued to retain its position as the leading private life insurer in the country.

UNI