ICICI Bank 2008 Annual Report Download - page 45

Towards a better life
KEY SUBSIDIARIES
ICICI Prudential Life Insurance Company
ICICI Prudential Life Insurance Company (ICICI Life) continued to maintain its market leadership among private
sector life insurance companies with a retail market share of about 12.7% in the overall industry in fiscal 2008 (on
weighted received premium basis) as against 9.1% in fiscal 2007. ICICI Life’s new business premium (on weighted
received premium basis) grew by 68.3% from Rs. 39.71 billion in fiscal 2007 to Rs. 66.84 billion in fiscal 2008.
Life insurance companies worldwide make losses in the initial years, in view of business set-up and customer
acquisition costs in the initial years as well as reserving for actuarial liability. While the growing operations of
ICICI Life had a negative impact of Rs. 10.31 billion on the Bank’s consolidated profit after tax in fiscal 2008 on
account of the above reasons, the company’s unaudited New Business Profit (NBP) for fiscal 2008 was Rs. 12.54
billion as compared to Rs. 8.81 billion in fiscal 2007. NBP is a metric for the economic value of the new business
written during a defined period. It is measured as the present value of all the future profits for the shareholders, on
account of the new business based on standard assumptions of mortality, expenses and other parameters. Actual
experience could differ based on variance from these assumptions especially in respect of expense overruns in
the initial years.
ICICI Lombard General Insurance Company
ICICI Lombard General Insurance Company (ICICI General) enhanced its leadership position with a market share
of 29.8% among private sector general insurance companies and an overall market share of about 11.9% during
fiscal 2008. ICICI General’s gross written premium (excluding share of motor third party insurance pool) grew by
11.4% from Rs. 30.03 billion in fiscal 2007 to Rs. 33.45 billion in fiscal 2008. The industry witnessed a slowdown
in growth on account of de-tariffication of the general insurance industry whereby insurance premiums were
freed from price controls, resulting in a significant reduction in premium rates. The industry also witnessed the
formation of the motor third party insurance pool for third party insurance of commercial vehicles. Accordingly,
all insurance companies are required to cede 100% of premiums collected and claims incurred for this segment
to the pool. At the end of the year, the results of the pool are shared by all insurance companies in proportion
to their overall market share in the industry. The motor third party pool had a negative impact of Rs. 0.53 billion
on the profit of ICICI General. ICICI General is also required to expense upfront, on origination of a policy, all
sourcing expenses related to the policy. ICICI General achieved a profit after tax of Rs. 1.03 billion in fiscal 2008,
a growth of 50.5% over fiscal 2007.
ICICI Prudential Asset Management Company
ICICI Prudential Asset Management Company (ICICI AMC) was the second largest asset management company
in India with average assets under management of Rs. 543.55 billion for March 2008. ICICI AMC achieved a profit
after tax of Rs. 0.82 billion in fiscal 2008, a growth of 69.7% over fiscal 2007.
ICICI Venture Funds Management Company Limited
ICICI Venture Funds Management Company Limited (ICICI Venture) strengthened its leadership position in private
equity in India, with funds under management of about Rs. 95.50 billion at year-end fiscal 2008. ICICI Venture
achieved a profit after tax of Rs. 0.90 billion in fiscal 2008 compared to Rs. 0.70 billion in fiscal 2007.
ICICI Securities Limited and ICICI Securities Primary Dealership Limited
The securities and primary dealership business of the ICICI group have been reorganised. ICICI Securities Limited has
been renamed as ICICI Securities Primary Dealership Limited. ICICI Brokerage Services Limited has been renamed
as ICICI Securities Limited and has become a direct subsidiary of ICICI Bank. ICICI Securities achieved a profit
after tax of Rs. 1.50 billion and ICICI Securities Primary Dealership achieved a profit after tax of Rs. 1.40 billion,
in fiscal 2008.
ICICI Bank UK PLC
ICICI Bank UK PLC (ICICI Bank UK) is a full-service bank offering retail and corporate and investment banking
services in the UK and Europe. ICICI Bank UK’s total assets increased by 81.4% from US$ 4,868 million at
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