Summary
ICICI Prudential Life Insurance Company Limited - 9M FY2026 Earnings Call Summary Tuesday, January 13, 2026 3:30 p.m. IST
Event Participants
Executives 7 Amit Palta, Anup Bagchi, Dhiraj Chugha, Dhiren Salian, Judhajit Das, Manish Kumar, Souvik Jash
Analysts 11 Dipanjan Ghosh, Harshal, Kushagra Goel, Madhukar, Mohit, Nidhesh, Nischint Chawathe, Prayesh Jain, Raghvesh, Shobhit Sharma, Shreya Shivani, Sanketh Godha, Swarnabha Mukherjee, Umang Shah
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Overall APE | ₹2,286 crores (Q3) | +3.6% YoY; Growth was moderated by a high base in the previous year’s group funds business. |
| Retail APE | ₹1,566 crores (Q3) | +9.9% YoY; Driven by strong growth in retail protection and non-linked savings. |
| VNB | ₹615 crores (Q3) | Reported for Q3-FY26; 9M FY26 VNB stood at ₹1,664 crores. |
| VNB Margin | 24.4% (9M FY26) | Flat vs H1; Higher protection mix and product-level profitability initiatives offset the loss of GST input tax credit. |
| Retail Protection APE | ₹128.4 crores (Q3) | +40.8% YoY; Aided by recent GST reforms making products 18% cheaper for consumers. |
| 13-Month Persistency | 84.4% | -400 bps YoY approx.; Impacted by specific channel-product cohorts; corrective actions are underway. |
| Cost-to-Premium Ratio | 19.3% (9M FY26) | -50 bps YoY; Continued optimization and “waste cutting” initiatives despite GST input tax credit withdrawal. |
| Solvency Ratio | 214.8% | Strong capital position; Company replaced ₹1,200 crores of subordinated debt during the quarter. |
| Assets Under Management | ₹3.31 lakh crores | +6.5% YoY growth over December 31, 2024. |
Geographic & Segment Commentary
- Retail Protection: Registered robust 40.8% YoY growth in Q3, outperforming other segments. Management attributes this to the GST waiver and increased ease of onboarding, noting that only 13% of the addressable population is currently protected.
- Savings (Linked & Non-Linked): Non-linked savings grew 15.2% as customers locked in yields in a declining interest rate environment. Linked business grew 8.3% YoY, benefiting from stable equity markets and a focus on products with high sum-assured multiples.
- Annuity: Declined 16.4% in Q3 due to a very high base (50% growth) in the previous year. Management expect this segment to normalize and return to growth in the coming quarters as the base effect fades.
- Group Protection & Credit Life: Group protection grew 6.2% YoY. The Microfinance Institution (MFI) segment within Credit Life has begun to show signs of revival in Q3 after a period of stress.
Company-Specific & Strategic Commentary
- GST Reform Impact: The withdrawal of input tax credit (ITC) effective Sept 22, 2025, increased costs. Management is partially offsetting this through negotiations with distributors to align commissions and improving product-level profitability.
- Product Innovation: Launched three new products—‘ICICI Pru Wealth Forever’ (legacy), ‘ICICI Pru SmartKid 360’, and ‘ICICI Pru Wealth Elite Pro’ (ULIP)—to capture long-term wealth creation demand.
- Distribution Diversification: Successfully reduced concentration risk; ICICI Bank now contributes 15% to total APE, while other single partners contribute no more than 5%-7% each.
- Regulatory Shift (‘Sabka Bima Sabki Raksha’ Act 2025): Management welcomed the 100% FDI limit increase and provisions for “Insurance for All by 2047,” which are expected to attract long-term capital to the sector.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Business Momentum | Positive for Q4 FY2026 | Management expects the growth trajectory seen in Q3 to continue into the final quarter. |
| VNB Growth | Sustainable Absolute Growth | Focus remains on growing absolute VNB rather than just margins; growth will be led by APE. |
| Persistency | 85%+ Target | Management aims for persistency to trend back toward 85% and above by mid-FY2027. |
Risks & Constraints
| Risk | Context |
|---|---|
| Persistency Pressure | 13-month and 61st-month persistency have seen declines in specific cohorts. While corrective actions are initiated, prolonged weakness could impact EV and margins. |
| GST Cost Absorption | The inability to claim input tax credit is a recurring hit. While currently offset by mix and yields, full recovery depends on successful commission renegotiations with partners. |
| Competitive Intensity | High competition in the bancassurance channel (non-ICICI Bank) and web aggregators may put pressure on counter shares and commission structures. |
Q&A Highlights
Retail Protection Growth
- Question: Is the 40% growth in protection sustainable or just pent-up demand from GST changes? (Madhukar, JP Morgan)
- Answer: It is not pent-up demand but improved affordability as products are now 18% cheaper. With only 13% penetration, the multi-decadal opportunity remains intact (Amit Palta).
Margin Drivers
- Question: How were margins maintained despite the GST ITC loss? (Sanketh Godha, Avendus Spark)
- Answer: The impact was cushioned by a higher retail protection mix (up to 8.2% of APE), higher sum-assured multiples, longer policy tenures, and a favorable yield curve (Dhiren Salian).
Persistency Issues
- Question: What is causing the drop in the 61st-month bucket? (Shreya Shivani, Nomura)
- Answer: Regulatory changes from 2019 pushed back foreclosure dates for ULIPs and traditional products. While this depresses the persistency ratio, the AUM stays with the company longer (Dhiren Salian).
PFM Subsidiary Transfer
- Question: Why was the Pension Fund Management (PFM) subsidiary transferred to ICICI Bank? (Umang Shah, Banyan Tree)
- Answer: The move aligns with bank-level synergies for the accumulation phase of NPS. The life company still captures the de-accumulation (annuity) phase, so the strategy remains unchanged (Dhiren Salian).
Key Takeaway
ICICI Prudential delivered a resilient Q3 FY2026, characterized by a 9.9% growth in Retail APE and a significant 40.8% surge in retail protection business, the latter buoyed by GST reforms. Despite the structural headwind of losing GST input tax credits, the company maintained 9M margins at 24.4% through an improved product mix and tighter cost control, reducing the cost-to-premium ratio to 19.3%. Strategic focus has shifted from high-concentration bank distribution to a diversified model where no single external partner exceeds 7% of APE. While persistency remains a watch-point at 84.4%, management is confident that corrective actions and a robust product pipeline for affluent segments will drive sustainable absolute VNB growth. The company is well-positioned to capitalize on a favorable macroeconomic environment and recent legislative amendments to maintain its growth momentum into Q4 and beyond.
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