ICICI Prudential Life Insurance Co. Ltd. posted an 18% year-on-year rise in net profit for the second quarter of FY2025–26, reaching Rs. 296 crore, supported by improved operating efficiencies and higher margins. While new business growth slowed marginally, the company sustained profitability through disciplined cost control and a favorable product mix. Its Value of New Business (VNB) rose 1% to Rs. 592 crore, and the VNB margin expanded to 24.4%. Despite a decline in Annualised Premium Equivalent (APE), strong solvency, expanding assets under management, and rising embedded value underscore its financial resilience and long-term growth potential.
Profit Growth and Financial Performance
ICICI Prudential Life’s Q2 FY26 performance underscores the insurer’s operational discipline in a volatile macro environment. The company’s net profit rose 18% to Rs. 296 crore, up from Rs. 251 crore in the same quarter last year. Total premium income increased nearly 10% year-on-year to Rs. 12,297 crore, primarily supported by robust retail inflows.
However, the APE, which reflects new business premium on an annualized basis, slipped 3% to Rs. 2,422 crore. Despite this moderation, profitability remained stable due to a better product mix and higher cost efficiency. The VNB edged up 1% to Rs. 592 crore, while the VNB margin improved to 24.4% from 23.4% last year, indicating stronger returns on new business.
Operational Efficiency and Financial Strength
The insurer’s continued focus on optimizing expenses and improving productivity paid off. Its cost-to-premium ratio for the savings segment improved to 17.7%, compared to 20.5% a year earlier, signaling enhanced operational leverage.
Financial stability also remained robust. Assets under management (AUM) expanded to Rs. 3.21 lakh crore, up from Rs. 3.09 lakh crore in the previous year, while embedded value (EV) climbed to Rs. 50,501 crore, reflecting long-term profitability and sustainable value creation. The solvency ratio stood at a healthy 213.2%, comfortably above regulatory requirements, reaffirming the company’s ability to withstand potential market shocks.
Business Mix and Distribution Trends
The company’s product portfolio continued to diversify, with linked savings products contributing 48% of APE, followed by non-linked savings (22%) and protection (19%). Within protection, the retail protection segment grew by 2.4%, while the annuity segment recorded a robust 11.8% year-on-year increase.
Distribution dynamics also presented a mixed picture. The agency and direct channels grew by 23% each, reflecting stronger traction in proprietary networks and digital platforms. The partnership channel also expanded 15%, but bancassurance APE fell 21%, indicating slower momentum from bank-led sales—a key area the insurer may need to re-energize to drive future growth.
Customer Metrics and Service Quality
Customer persistency and claim settlement remain among ICICI Prudential’s strongest differentiators. The 13-month persistency ratio—a measure of policy renewal behavior—stood at 85.3%, while the claim settlement ratio remained an impressive 99.3%, with average claim resolution achieved within just 1.1 days.
These indicators underscore the company’s commitment to customer trust and operational transparency, key differentiators in an increasingly competitive insurance market.
Strategic Outlook and Analyst Commentary
While the insurer’s profit trajectory remains solid, the slight contraction in APE signals the need to reinvigorate new business momentum. Industry analysts suggest that the company’s strategy to deepen protection offerings, enhance digital distribution, and focus on long-term annuity products will be central to sustaining growth.
ICICI Prudential’s strong solvency position and prudent expense management provide it with the flexibility to invest in digital transformation and channel expansion. As customer preferences shift toward customized, technology-enabled insurance solutions, the company’s focus on innovation and operational agility could further strengthen its competitive advantage.
Conclusion
ICICI Prudential Life’s second-quarter performance highlights a well-managed balance between growth, profitability, and prudence. Despite headwinds in new business acquisition, its rising margins, sound capital adequacy, and operational discipline position it for sustainable expansion. The insurer’s ability to maintain profitability while navigating changing market dynamics underscores its maturity as one of India’s most stable and strategically focused life insurers.
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