# 1. Financial Performance ## A. Key Figures * **Total Premium Income:** **₹2,45,680 Cr** (6M Sep-25) (+14%) · **₹2,33,671 Cr** (6M Sep-24) * **Individual Premium Income:** **₹1,50,715 Cr** (+16% YoY) · Renewal portion: **₹1,22,224 Cr** * **PAT:** **₹21,040 Cr** (+36% YoY) * AUM: ₹57.23 Lakh Cr (+3.31% YoY) * Expense Ratio: 11.28% (-146 bps YoY) * Solvency Ratio: 2.13 (vs. 1.98 in prior year) ## B. Profit & Capital Trends * **Strong Earnings Growth:** PAT surged on the back of robust premium growth and improved cost efficiency, despite mark-to-market headwinds impacting in-force business value. * **Capital Strength:** Adjusted net worth rose steadily due to surplus transference, while solvency ratio remains well above regulatory minimums. * **Accounting Policy Clarity:** Management reaffirmed current practice of routing only **realized gains** from ASM to shareholder funds, with **no plans to recognize unrealized gains**, citing volatility and accounting prudence. ## C. Cost Efficiency & Operational Focus * **Dramatic Cost Improvement:** Expense ratio nearly halved year-on-year, reflecting deep operational efficiencies and disciplined spending amid scaling. * **Efficiency Drive Continues:** Management prioritizing volume growth and cost optimization, with ITC management a key lever in sustaining low expense ratios. ## D. Disclosure & Segment Transparency * **Limited H1 Segment Breakdown:** No current disclosure of fair value changes between Par and Non-Par segments for H1, though full-year data is available; management acknowledged the query and intent to address. * **Fair Value Drivers:** Changes in fair value reflect both **equity performance and debt portfolio sensitivity to interest rate shifts**, not just market gains. --- # 2. New Business & APE ## A. Key Figures * Individual NBP: ₹28,491 Cr (-3.54% YoY) * **Total APE:** ₹29,034 Cr (Ind: ₹17,170 Cr · Grp: ₹11,864 Cr) * Non-Par Individual APE: ₹6,234 Cr (+30.47% YoY) · 36.31% of Ind APE * **Group NBP:** ₹92,586 Cr (+73% YoY) · **Total Group Premium:** ₹94,965 Cr ## B. Individual APE * **Sharp Decline in Individual NBP:** Significant de-growth driven by tough YoY comparisons, including a surge in policy sales in September 2024 ahead of product withdrawals. * **Market Share Erosion:** Individual segment share dropped to **21%** from **79%** a year ago, reflecting both base effects and competitive pressures. * **Non-Par Momentum Intact:** Despite top-line weakness, non-par APE grew nearly **50%**, maintaining **31%** mix, signaling sustained traction in higher-margin products. * **NOP Under Pressure:** New business profitability declined sharply across all channels, raising strategic questions around margin resilience and future NOP recovery. ## C. Group APE * **Group Business Acceleration:** Robust growth in group NBP and total premium, driven by strong deal execution and favorable comparables, now representing **86% of total APE**. * **Sustained Non-Par Growth Trajectory:** Non-par APE in group segment aligns with multi-year momentum, though management emphasizes no fixed mix targets. --- # 3. Product & Segment Mix ## A. Key Figures * **Non-Par APE Mix:** **31%** (Rs 6,234 Cr) * **Par APE:** **63.69%** (Rs 10,936 Cr) * **Total Products:** **57** as of Sep 30, 2025 (+2 from H1 FY26) ## B. ULIP Performance * **ULIPs Driving Non-Par Growth:** ULIPs are the fastest-growing product category, with **over 100% sales growth** in H1, fueling strong momentum in non-par business and Value of New Business (VNB). * **Profitability Lever:** ULIPs contribute **above-average margins**, making them a key driver of overall margin expansion despite traditionally lower margins versus par products. * **Strategic Trade-Off:** Product mix increasingly shaped by customer demand, with ULIP growth coming at the expense of annuity volumes due to focused sales efforts. ## C. Savings & Annuity * **Annuity Margin Pressure:** Previously high-margin annuity business facing compression, prompting strategic review and plans for revitalization. * **Savings Segment Rebound Expected:** Company is refocusing on savings and annuity products, with **Q3 likely to show improvement** driven by MDRT initiatives and new product launches. * **IRR as Growth Tool:** New strategies include offering **favorable IRRs** to stimulate demand in savings and annuity segments. ## D. Par vs Non-Par * **Confirmed Mix Shift:** Non-par APE mix reached **31%**, validating sustained shift toward non-par products, supported by strong ULIP and savings product traction. * **EV Growth Drivers:** Embedded value growth reinforced by **improved product mix** in new business, particularly in non-par categories like ULIPs and savings. ## E. New Product Launches * **Accelerated Non-Par Innovation:** Launched **4 new non-par products** in FY26, including post-GST-exemption launches (Jan Suraksha, Bima Lakshya), expanding customer-centric offerings. * **Product Suite Expansion:** Total product count increased to **57**, reflecting strategic broadening of individual and group solutions amid regulatory tailwinds. --- # 4. Distribution Channels ## A. Key Figures * **Total Agents:** **1,485,000** (up YoY) · **1,439,000** prior year * **Agency Policies Sold:** **7.14 Mn** H1 FY26 vs **8.92 Mn** H1 FY25 * **Ananda App Policies:** **878,470** H1 FY26 (+46% YoY) * Bancassurance & Alternate Channels NBP: **₹2,024.10 Cr** H1 FY26 (+67.62% YoY) · **₹1,207.54 Cr** H1 FY25 * **Bancassurance NBP:** **₹1,265.88 Cr** H1 FY26 (+48.19% YoY) * Alternate Channel NBP: ₹758.22 Cr H1 FY26 (+114.6% YoY) * **Bima Sakhis NBP:** **₹1,096 Cr** H1 FY26 ## B. Agency Force * **Agent Count Growth Amidst Market Share Volatility:** Agent base expanded significantly year-on-year, though **market share by agent count dropped to 86% from 56%**, signaling competitive or definitional shifts. * **Declining Agency Productivity:** Policies per agent declined meaningfully despite agent growth, with **H1 FY26 sales down 20% YoY**, highlighting retention and efficiency challenges. * **Digital Enablement Gains Traction:** Ananda app usage surged, with **46% YoY growth in app-facilitated policies**, and active agent engagement rising, indicating progress in digital adoption. * **Focus on Agent Productivity:** Management prioritizing training and motivation to lift **average of 12 policies per agent**, aiming to stabilize force and improve output. ## C. Bancassurance * **Bancassurance Drives Premium Growth:** Channel delivered **strong double-digit premium growth**, contributing meaningfully to overall new business performance. * **Strategic Expansion with AU Bank:** New partnership with **AU Small Finance Bank** expected to broaden distribution reach and support sustained NBP growth. ## D. Alternate Channels * **Robust Growth Across Non-Agency Channels:** Bancassurance and Alternate Channels together posted **62% YoY NBP growth**, now representing a **growing share of individual new business premium**. * **Alternate Channel Resurgence:** Despite small base, Alternate Channel achieved **60% YoY NBP growth**, signaling early-stage scalability. ## E. Bima Sakhis * **High-Impact Rural Penetration:** **57 lakh Bima Sakhis** generated **₹1,096 Cr NBP**, demonstrating strong grassroots traction and financial inclusion impact. * **Expanding Rural Footprint:** Network spans **1.09 lakh gram panchayats (44% coverage)**, with ambition to achieve universal rural presence. --- # 5. Persistency & Claims ## A. Key Figures * 13th Month Persistency (Premium Basis): 75.29% (Sep 2025) vs 77.62% (Sep 2024) * 61st Month Persistency (Premium Basis): 63.81% (Sep 2025) vs 61.46% (Sep 2024) * **Maturity Claims:** **₹1,07,587 Cr** (H1 FY26) (+81% YoY) * **Death Claims:** **₹12,049 Cr** (H1 FY26) (+47% YoY) * **New Policies Sold:** **7.26 Mn** (H1 FY26) vs **9.17 Mn** (H1 FY25) ## B. Persistency Trends * **Diverging Cohort Performance:** Near-term premium-based persistency declined sharply, but longer-duration cohorts (37th and 61st months) showed strong improvement, indicating stabilization in mature policies. * **Policy Count vs Premium Basis:** Persistency measured by premium volume remains materially higher than policy count basis, underscoring concentration in higher-value policies. * **Near-Term Pressure:** Weaker retention in low-ticket-size policies—driven by seasonal income volatility—weighed on short-term persistency; renewal impact to reflect in next period. ## C. Claims Activity * **Surge in Maturity Payouts:** Record maturity claims reflect the scaling of prior sales cycles, with **₹1.08 lakh crore** disbursed in H1 FY26. * **High Volume Processing:** Over **9.6 million individual claims** processed in H1, predominantly maturity and survival benefits, demonstrating operational throughput. --- # 6. Regulatory & Tax Risks ## A. Key Figures * Embedded Value: Rs 8.13 lac crores disclosed (no component-level breakdown) ## B. GST Impact * **Positive Demand Tailwinds:** GST exemption on life insurance has created strong growth momentum, with full sector-wide benefits expected in upcoming quarters. * **Near-Term Disruption:** Policy purchases nearly halted between 5–22 September 2024 as customers awaited the 22 September exemption rollout. * **Profitability Risks Contained:** Despite ITC unavailability impacting EV and VNB margins, management asserts the effect is well within disclosed ranges and **significantly below 5%**, with mitigation underway. * **Transparency Pending:** Full margin impact of GST on EV and VNB will be assessed by year-end, with details to follow in the embedded value walk presentation. ## C. ITC Uncertainty * **Margin Pressure Inquiry:** Analysts seek quantified near-term ITC impact on margins under constant mix, along with **VNB sensitivity** from the final 10 days of the quarter. * **Mitigation in Focus:** Company exploring structural adjustments, including **commission payout changes**, to offset ITC-related cost pressures. ## D. RBC Transition * **Regulatory Progress:** LIC has submitted QIS1 and QIS2 reports to IRDAI for RBC transition, though final solvency ratios remain **subject to ongoing regulatory discussions**. * **Solvency Uncertainty:** Current RBC-based solvency estimates are dynamic; no definitive figures can be provided until regulatory alignment is complete. ## E. Master Circular * **Sales Disruption:** New rules effective 1 October 2024 forced higher minimum sum assured, triggering a sharp drop in policies sold—especially in the **Rs 1–1.99 lakh** ticket segment. --- # 7. Guidance & Outlook ## A. Key Figures * **VNB (Value of New Business):** **₹5,111 Cr** (6M FY26) (+3%) · **₹4,551 Cr** (6M FY25) * Net VNB Margin: **17.6%** (6M FY26) (+140 bps) · **16.2%** (6M FY25) ## B. VNB Margin Trend * **Strong Margin Expansion:** Net VNB margin surged 140 bps to 6%, driven by **favorable business mix** (higher non-par and ULIP contribution) and **positive RFR movements**, despite negative operating assumption changes. * **Core Business Strength:** Embedded Value and present value of future profits improved significantly, underpinned by robust core business contribution and resilient in-force performance amid MTM volatility. * **Sustainable Momentum:** Management expresses confidence in maintaining or improving the 6% VNB margin in H2, citing execution strength and high business quality, though mix and ticket size remain dynamic. ## C. Product Focus & Strategy * **Customer-Centric Design:** Product strategies prioritize evolving customer needs over VNB optimization, with financial metrics viewed as outcomes rather than targets. * **Quality Over Mix Targets:** Business mix realignment continues, but focus remains on sustained growth and long-term stabilization, not rigid mix objectives. ## D. Market Expansion & Catalysts * **GST as Growth Lever:** GST reforms are seen as a structural growth enabler, expected to boost top-line, enhance distribution economics, and improve expense efficiency. ## E. Digital Initiatives * **Pan-India Digital Rollout:** Customer Super App and Sales Saathi App successfully launched nationwide in August–September 2025, enhancing distribution and service capabilities.