ICICI Prudential Life Insurance Company Limited — Q4 FY26 earnings call

Call held 14 Apr 2026

Management summary

ICICI Prudential Life Insurance delivered strong financial results for FY2026, with double-digit VNB and PAT growth, and significant VNB margin expansion. The retail protection segment was a key growth driver, benefiting from GST reforms. While the company maintained a robust balance sheet and operational efficiency, it faced headwinds from volatile equity markets impacting linked business and negative persistency variance from a specific annuity product. Management outlined a strategy of granular focus and micro-market expansion to address growth challenges in certain distribution channels.

Highlights

  • Value of New Business (VNB) grew 10.9% YoY to ₹26.29 billion in FY2026, demonstrating strong business performance.

  • Profit After Tax (PAT) grew robustly by 34.6% YoY to ₹16 billion, driven by higher investment income and a one-time gain.

  • VNB margin expanded significantly by 190 basis points YoY to 24.7%, reflecting improved product mix and operational efficiencies.

  • The retail protection segment showed exceptional growth of 32.3% YoY for the full year and 60.5% in Q4 FY2026, aided by GST reforms.

  • The company maintained a strong solvency ratio of 227.3%, well above the regulatory requirement of 150%.

Concerns

  • Total economic and investment variance was negative ₹7.78 billion due to yield curve and equity market movements.

  • Persistency variance was negative ₹2.64 billion, primarily due to higher withdrawals in the 100% premium back annuity product.

  • Linked business APE grew only 1.6% YoY in FY2026, impacted by volatile equity markets.

  • Agency channel growth was described as 'tepid' and declined in Q4, presenting a challenge for overall APE growth.

Key financials

  1. VNB 26.29 Bn +10.9%YoY
  2. VNB Margin 24.7%
  3. PAT 16 Bn +34.6%YoY
  4. APE 106.41 Bn +2.2%YoY
  5. New Business Premium 248.1 Bn +10%YoY
  6. Embedded Value 529.89 Bn +10.5%YoY
  7. AUM 3.14 Tn
  8. Solvency Ratio 227.3%
  9. 13th Month Persistency 84.5%
  10. Retail New Business Sum Assured 4.5 Tn
  11. Total In-force Sum Assured 46.11 Tn +16.9%YoY

What they filed

Q1 FY27: revenue up 12.3%, net profit up 27.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue25,157 4,536 15,687 25,400 11,935 −53%22,833 +403%3,299 −79%28,513 +12%
EBITDA327 250 424 223 -6 −102%755 +202%-639 −251%293 +31%
Net profit252 326 386 302 299 +19%390 +20%609 +58%386 +28%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Retail Protection
    60.5% Growth (Q4 FY26)32.3% Growth (FY26)
  • Group Protection
    7.1% Growth (FY26)
  • Group Term Business
    14.6% Growth (FY26)
  • Credit Life Business
    1.8% Growth (FY26)
  • Linked Business APE
    1.6% Growth (FY26)14.2% 2-year CAGR
  • Non-linked Savings APE
    15.4% Growth (first nine months)
  • Annuity Business
    20% 4-year CAGR7% Share of Retail Mix
  • Group Funds Business
    26% Growth (FY26)
  • Agency Channel
    26.86 Bn APE
  • Direct Channel
    14.3 Bn APE
  • Bancassurance Channel
    3.6% Growth (FY26)29.8% Contribution to Total APE
  • Partnership Distribution Channel
    23.4% Growth (FY26)13.2% Contribution to APE Mix
  • Group Business
    14.5% Growth (FY26)18.3% Contribution to Overall APE Mix

Capital allocation

high confidence
  • Liquidity Liquidity disclosed Solvency ratio stood at 227.3%, well capitalised and much ahead of the regulatory requirement of 150%.
    Our solvency ratio stood at 227.3%, well capitalised and much ahead of the regulatory requirement of 150%.

Guidance & targets

Profitability

  • RoEV Profitability · longer-term · Medium confidence 13-14%
    Now technically, on a longer-term basis, we should still be at the 13% to 14% range, depending, of course, on how the yield curve shapes up, depending, of course, on how we are able to grow VNB.

    — Dhiren Salian

Diversity

  • Gender Diversity Diversity · ongoing · Medium confidence improve from 30%
    On the diversity front, our gender diversity is now at 30%, and we shall continue to strive to improve it from here.

    — Judhajit Das

What to watch in Q1 FY27

IND-AS implementation status

Next year (FY2027)
Current Forbearance sought for FY2026, will go live next year.
Target Live implementation of IND-AS.

Why it matters

This will change financial reporting standards and potentially key performance indicators (e.g., shift from RoEV to ROE), impacting how the company's performance is assessed.

So yes, technically, we should be live with IND-AS, but as approved by the Board, we will be seeking forbearance for a year.

Risks & concerns

  • Potential regulatory changes on commissions

    high

    Management is not aware of discussions beyond a data request and cannot comment on potential impacts.

    Analyst deflected

  • Geopolitical conflicts impacting new business sales

    medium

    The war in West Asia impacted new business sales in March 2026 across most segments except protection.

    Management acknowledged

  • Volatile equity markets impacting linked business APE growth

    medium

    Linked business APE grew only 1.6% YoY in FY2026 due to volatile equity markets.

    Management acknowledged

  • Negative persistency variance from 100% premium back annuity product

    medium

    Persistency variance was negative ₹2.64 billion, largely due to higher withdrawals in this specific annuity product.

    Management acknowledged

  • Competition from high bank Fixed Deposit rates impacting non-par product sales

    medium

    Steep bank FD rates make non-par products less attractive, and cutting margins for growth may not be accretive to shareholders.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Growth outlook for FY2027 and strategy Partial
In terms of growth for the next financial year, I think this is quite a volatile time at this stage... But rest assured, in the way that we're approaching the problem is that we would continue to go granular, continue to understand who are these customer segments that we should be looking at, what are the product mix that we would need, work with our distribution channels to be able to deliver the right proposition for customers as well as shareholders.

Management acknowledges market volatility and provides a qualitative strategy for growth, but refrains from giving specific numerical guidance for FY2027, indicating uncertainty.

Asked by Swarnabha Mukherjee

Impact of Middle East war on new business sales and demand for ULIPs/non-par products Direct
I do believe that the war in West Asia has, to some extent, impacted new business sales in the month of March. Difficult to guess how much it would be, but clearly, there has been some impact... It's been across the board, except for protection.

Reveals a specific external geopolitical event impacting sales in March 2026, providing context for potential Q4 performance and near-term outlook.

Asked by Supratim Datta

IND-AS transition and its impact on reporting and RoEV Direct
So yes, technically, we should be live with IND-AS, but as approved by the Board, we will be seeking forbearance for a year... In terms of the capital position, I believe the regulator still wants us to use the erstwhile solvency formulas... The RoEV will have less significance going forward.

Clarifies the timeline for IND-AS adoption (next year, not this quarter), the continued use of old solvency norms, and signals a shift away from RoEV as a key metric towards ROE for comparability.

Asked by Supratim Datta

Persistency variance and its negative impact on EVOP Direct
Persistency variance is a negative 2.64 billion, which is largely on account of the 100% premium back annuity product where the persistency experience fell short of long-term assumptions.

Identifies a specific product (100% premium back annuity) as the primary driver for the significant negative persistency variance, explaining a drag on EVOP.

Asked by Shreya Shivani

Agency channel underperformance and revival strategy Partial
In terms of growth, you're right, agency has not had a great year in the sense, the growth has not been great... But like I mentioned, we'll continue to work at it granularly, understand what are these micro segments that we need to go after and work with that.

Acknowledges the underperformance of a key distribution channel and outlines a strategy of granular focus and micro-segment targeting for revival, without providing specific timelines or numerical targets.

Asked by Swarnabha Mukherjee

Non-par business growth and competition from Fixed Deposits (FDs) Direct
I think one of the challenges that we run as an industry is that our product does get compared to what bank FD rates are in the current environment and bank FD rates continue to be fairly steep... if you were to actually start to cut margins to be able to deliver on growth on non-par, it may not be accretive to shareholders.

Highlights a structural challenge for non-par products due to competitive FD rates and management's reluctance to sacrifice margins for growth, explaining the subdued performance in this segment.

Asked by Madhukar Ladha

Potential regulatory changes on commissions Evasive
Manas, we are not aware of discussions. We do acknowledge that the regulators asked for data which we have provided, but we have not heard anything beyond that... I don't know what the regulator is thinking on that front. So, it will be a little difficult to comment.

Indicates uncertainty and lack of clear information regarding potential regulatory changes that could significantly impact the business model and profitability, leaving investors without specific guidance.

Asked by Manas Agrawal

Reclassification of MTM on assets and derivatives of policyholder funds in EV split Direct
The key change is that the shareholder share of the MTM that's on the assets and derivatives of the policyholder funds, that's been reclassified to VIF from ANW. That has absolutely no impact on the EV, just a reclassification within VIF and ANW. And this is consistent with how the market is looking at it.

Clarifies a technical accounting change in EV presentation, assuring investors it's a reclassification for consistency and has no impact on the overall Embedded Value.

Asked by Nidhesh Jain

3 min read 8 chapters

Detailed narrative

Strong Financial Performance & Margin Expansion

ICICI Prudential Life reported a Value of New Business (VNB) of ₹26.29 billion, marking a 10.9% YoY growth in FY2026. Profit After Tax (PAT) grew strongly by 34.6% YoY to ₹16 billion, partly aided by a ₹1.14 billion gain from the sale of ICICI Pension Fund Management Company. The VNB margin expanded significantly by 190 basis points YoY to 24.7% (from 22.8% in FY2025), driven by an improved product mix and enhanced operational efficiencies.

Retail Protection Segment Outperformance

The retail protection segment was a key growth driver, benefiting from GST reforms effective September 2025, which led to a 2.5 times higher retail sum assured growth post-reform. In H2-FY2026, retail protection witnessed a robust 50.9% YoY growth, contributing to a full-year growth of 32.3%. The company's total retail new business sum assured reached ₹4.5 trillion, demonstrating its strong position in this segment.

Resilient Balance Sheet & Operational Efficiency

The company maintained an industry-leading claim settlement ratio of 99.3% with an average turnaround time of 1.1 days. Its solvency ratio stood at a robust 227.3%, significantly above the regulatory requirement of 150%. Operational efficiencies, partly driven by the adoption of AI/ML technologies, led to a 40 basis points reduction in the savings cost to premium ratio, bringing it to 12.1% in FY2026, while the total cost to premium ratio remained stable at 18.2%.

Embedded Value Growth & Persistency Challenges

The Embedded Value (EV) grew by 10.5% YoY to ₹529.89 billion as of March 31, 2026, with an Embedded Value Operating Profit (EVOP) of ₹57.02 billion in FY2026. However, persistency variance was negative ₹2.64 billion, primarily attributed to higher withdrawals in the 100% premium back annuity product. The Return on Embedded Value (RoEV) for FY2026 was 11.9%.

Distribution Channel Performance & Strategy

While overall APE grew by 2.2% YoY to ₹106.41 billion, the agency and direct channels experienced declines, largely due to a high base in linked and annuity businesses from the previous year. Bancassurance grew by 3.6% YoY, contributing 29.8% to total APE, and Partnership Distribution grew by 23.4% YoY, contributing 13.2%. Management outlined a strategy focused on granular, micro-market led branch expansion, leveraging technology and analytics to improve productivity and revive growth in underperforming channels.

Market & Geopolitical Headwinds

The company noted that new business sales in March 2026 were impacted by geopolitical disruptions in the Middle East, leading to a slowdown across most segments except protection. Additionally, volatile equity markets affected linked business APE growth, which was only 1.6% YoY. Competition from steep bank Fixed Deposit rates also subdued growth in non-par products, as the company prioritizes accretive margins over aggressive growth in this segment.

ESG Commitments

ICICI Prudential Life maintained its highest ranking in the Indian life insurance industry for ESG, receiving the Platinum Award for its FY2025 ESG report. The company highlighted its commitment to environmental sustainability through green energy adoption and LEED/IGBC Platinum certifications for its headquarters and branches. It also reported a 30% gender diversity and covered 53.8 million lives through micro-insurance products for financial inclusion, with an overall claim settlement ratio of 99.8%.

IND-AS Transition & Future Reporting

The company is seeking forbearance for a year for the IND-AS transition, with plans to go live in FY2027. Management indicated that once IND-AS is implemented, the focus for investors will likely shift from RoEV to ROE for better comparability with other financial services companies, as RoEV will have less significance. A reclassification of the shareholder share of MTM on policyholder funds to VIF from ANW was noted as an alignment with market practice, with no impact on total EV.

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