ICICI Pru Life Q3 Margins Surge 320 Bps; Premium Growth Stalls
Overview
ICICI Prudential Life Insurance reported strong Q3 FY26 results, with Value of New Business margins expanding an impressive 320 basis points year-on-year to 24.4%. This surge, driven by a favourable product mix and robust retail protection growth, offset muted premium expansion and weakness in group business. Analysts highlighted margin resilience despite GST reforms, maintaining constructive outlooks for future profitability.
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ICICI Prudential Life Insurance Reports Strong Q3 Performance
ICICI Prudential Life Insurance posted strong third-quarter results for fiscal year 2026, with margins expanding significantly despite subdued premium growth. The insurer's Value of New Business (VNB) margins climbed 320 basis points year-on-year to 24.4% in the December quarter, exceeding analyst expectations.
Annualised Premium Equivalent (APE) saw modest growth of 4% year-on-year, reaching ₹2,530 crore. This slower top-line expansion was attributed to a high base from the previous year and weakness in the group business segment. However, absolute VNB rose 19% to ₹620 crore, and profit after tax also increased by 19% to ₹390 crore, demonstrating strong operational leverage and margin benefits.
Margin Resilience in Focus
Analysts from Motilal Oswal, Emkay, JM Financial, and Elara Capital singled out the VNB margin expansion as the quarter's most significant achievement. This performance was particularly noteworthy as it occurred despite the loss of Goods and Services Tax (GST) input tax credit.
Product Mix Drives Profitability
The improvement in profitability was largely fueled by a strategic shift in product mix, with a pronounced increase in retail protection policies. Brokerages noted over 40% year-on-year growth in retail protection APE, benefiting from improved affordability after GST exemptions on pure-term products. This segment's contribution to the overall protection pie grew substantially.
Mixed Growth Drivers
While retail protection offered a strong tailwind, the group business segment presented a drag, with lumpy APE declining sharply. Annuity sales also saw a dip compared to the high base of the previous year.
Analyst Outlook
Looking ahead, brokerages maintain a constructive view on margins, expecting continued improvement. Growth forecasts are more measured, though management commentary suggests APE growth should pick up in the final quarter of FY26 as base effects normalize. Several firms reiterated 'Buy' or 'Add' ratings, citing undemanding valuations relative to peers and the insurer's demonstrated ability to enhance profitability.
