ICICI Prudential Insurance appoints Anup Bagchi as CEO

After the completion of his term in June 2023, private sector life insurers will see a change of guard, as N S Kannan, the current MD chief executive officer CEO, will be superannuate from his services. Anup Bagchi, currently serving as the executive director ofICICI Bank, will be replaced as MD CEO of the company for five years, with effect from June 19, 2023, subject to the approval of the regulator.

The executive director chief operating officer will be appointed on May 1, 2023, subject to approvals by Bagchi.

He is the head of the bank's wholesale banking, transaction banking, markets group, and proprietary trading group. He has previously worked in retail banking, treasury, investment banking, small-scale industry, payment and settlement systems. Bagchi joined the ICICI group in 1992 and has over three decades of experience in the financial services industry.

Bagchi will take over the reins from Kannan, who has been with the ICICI group for over three decades. He has worked in various positions, including MD&CEO of ICICI Prudential Life and ED of ICICI Bank. Kannan has been at the helm since June 2018. Kannan, 58, successfully steered the company through various challenges, including the recent Covid 19 Pandemic, to build ICICI Prudential Life as a resilient and well-diversified franchise.

We believe that Bagchi is a good successor to Kannan. While Kannan faced the challenge of growing premiums during his tenure, we appreciate his focus on the value of new business VNB margins and VNB growth. During his five year tenure ICICI Prudential Life delivered a 15 -- 16 per cent VNB CAGR of 15 per cent, driven by the doubling of margins from 16 per cent to 32 per cent. Growth comes from margins rather than premium equivalent APE growth. The five-year APE CAGR has been flat due to the reduction in the ICICI Bank channel to APE contribution now down to 15 per cent from 50 per cent, according to Suresh Ganapathy, Associate Director, Macquarie Capital.

The biggest challenge for Bagchi is to drive APE growth for ICICI Prudential Life, which has been a challenge for Kannan. Despite a decent VNB growth, the subdued valuations for ICICI Prudential Life are because of weak APE growth, as investors believe that VNB growth is unsustainable beyond a certain point, he added.

The insurer's shares are trading 5 per cent higher at Rs 404.45 on the BSE after the announcement was made by the company.

The age of superannuation at ICICI Bank and its group companies is 58.