You have registered a strong growth this quarter. Your NBP is up 18%. Your VNB is up 36%. What would be the levers to ensure sustainability?
While you have pointed out correctly that the VNB has grown at 36% year on year for the fourth quarter. What we are particularly happy about is what we delivered on what we articulated four years back. You will all remember that four years back, we said that we want to double our FY19 VNB in four years time. And I am happy to say that for the financial year 2023 we have actually more than doubled our VNB. So that has been the key highlight of our VNB performance. And if you look at the year as a whole, the VNB has grown at 28% much ahead of the estimates. So that has been the highlight of our performance. You talked about what is the outlook given this I believe that the underlying of the delivery of VNB there has been a lot of work done on diversification of our platform. By platform what I mean is that be it the product suite or be it the channel diversification we are much more granular today compared to what we were four or five years back with adequate representation in the product mix of link products, non linked products, protection products, annuity and so on.
And similarly on the channel there is a well diversified channel mix we have today. So given all this, I believe that we are well positioned to further grow our VNB given the insurance potential and the regulatory developments in the country. So that is how I would summarise the results for this period.
Your premium growth over the last few years, especially from the banca channel has been a bit of a concern for shareholders. Do you think this is likely to change going forward?
Yes, the way we look at is that we are one of the well diversified channel companies in the space. What we have for a bank promoted company possibly we are one of the most well diversified within the banca itself across all the companies if you look at. So even now, if you look at our banca constitutes about 30% percent of our business with the agency constituting about 26% of our business. So growth concern you talked about, the way I look at it is that to split between ICICI Bank and non ICICI Bank. As you all know, ICICI Bank has been focusing on the banking products not so much on the third party products. Given that, obviously, the consequences are that the ICICI Bank growth rate has come down. It is in the public domain. We have seen a 38% decline, for example, in financial year 2023 year on year in ICICI Bank channel. The other channels if you look at other than ICICI Bank, we have actually put out a very strong growth rate of 28%. Even if you look at on a four year time period non ICICI Bank channel growth, it has been at 18% CAGR. So there should not be any concern whatsoever regarding the growth. And specifically, if you look at the Q4 of our performance, there has been a very solid growth in terms of our API and we have actually grown with ICICI Bank. Together, we have actually grown the APE at 27% year on year, so it is a solid platform and the growth has come back very strongly.
And particularly, I will point out that in the fourth quarter, the retail protection, which has been a bit struggling across the industry during this pandemic period because of various factors, especially supply side factors has come back on track. We have actually seen a 28% year on year growth in retail protection alone. And as you know, it is a great product from a customer perspective in terms of fulfilling their protection requirements. And from our perspective, it is a high margin product and given that the base is low, that is also going to give us a huge growth in the VNB going forward. So I think there should not be any concern whatsoever on the growth of the company, not only on VNB, but also on the top line.
What about any major changes in the product mix that you have witnessed in this quarter, anything specific, any new products that you would like to introduce in FY24 especially in light of the recent changes in the budget on the high premium policies?
The way we look at this high premium tax, etc is quite different from probably some of the other players we look at in the industry. We do believe that we should have a product range to meet the needs of the customers. That is our primary plan and not on tax arbitrages or anything like that. There could be some arbitrages in the short term. There could be some policy things in the short term, which we should be taking advantage of in terms of having a base to take advantage of such situations.
But beyond that, our focus is on meeting the needs of the customers. So we had put out some time by in the public domain that these high ticket policies just constitute 6% of our APE. That is one of the lowest in the industry. So to that extent, we do not have any impact at all. And we have had similar situations in the past of tax changes for ULIP and when we looked at our product mix post and pre that tax change we did not have any significant difference.
So that goes to say that this tax matters are left to the government. I am sure the government is taking an appropriate decision looking at all the factors but we should be ready to play within that. That is the way we feel.
What is the best way to play within that is to have a full product suite, have a well diversified channel mix and take advantage of the great insurance opportunity in the country so to that extent, I do believe that these are all some of the passing sort of clouds, I would say, and we will be back on track and we are already back on track.
So we are not dependent on any tax regime change or any specific incentives being given for our products. And that is the way we have run our business. That is the way we will continue to run our business. The results we have seen across these last four years is really a testimony to the fact that a well diversified channel and well diversified product mix can do wonders to the VNB development for a company.