---
title: "Life insurers well placed on valuation, margin expansion triggers"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/283793064.md"
description: "Life insurers experienced a significant rise in new business premiums (NBP) in FY26, with a 15.7% year-on-year growth, despite uneven momentum heading into FY27 due to global uncertainties. Private insurers outpaced LIC, with SBI Life leading individual APE growth at 8.5% in March. Valuations in the sector are attractive, and VNB margins are expected to improve as GST changes normalize. However, potential regulatory changes could pose risks, particularly for SBI Life, which maintains strong growth and margins. Overall, growth in retail protection and annuity products is anticipated to enhance return ratios across insurers."
datetime: "2026-04-23T00:39:25.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/283793064.md)
  - [en](https://longbridge.com/en/news/283793064.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/283793064.md)
---

# Life insurers well placed on valuation, margin expansion triggers

Life insurers recorded a strong expansion in new business premiums (NBP) in FY26, although growth momentum remains uneven heading into FY27 amid global uncertainties and regulatory factors.

NBP grew 15.7 per cent year-on-year (Y-o-Y) in FY26, compared with 5.1 per cent growth in FY25. In March 2026 alone, NBP rose 23.5 per cent Y-o-Y.

Annual premium equivalent (APE) increased 14.5 per cent Y-o-Y during the year, with private insurers growing faster at 14.9 per cent compared to 13.9 per cent for Life Insurance Corporation (LIC).

Among private players, SBI Life recorded individual APE growth of 8.5 per cent Y-o-Y in March, followed by Axis Max Life at 6.9 per cent.

LIC posted 9.9 per cent growth, while ICICI Prudential Life (IPRU Life) and HDFC Life saw marginal declines of 0.9 per cent and 0.3 per cent, respectively.

For FY26, Axis Max Life led with 18.7 per cent growth, followed by SBI Life at 13.1 per cent. HDFC Life grew 7.7 per cent, while IPRU Life saw a decline of 1.2 per cent.

SBI Life retained market leadership in individual APE with a 16.5 per cent share in March.

Despite a strong March performance, growth in the fourth quarter (Q4) lagged the third quarter (Q3).

GST 2.0 changes provided some support, but geopolitical instability weighed on overall momentum.

Return-guarantee products are expected to remain attractive due to a spread of over 100 basis points between government security yields and deposit rates.

Valuations across the sector, ranging from 0.6 to 2.1 times FY27 price-to-embedded value (P/EV), appear attractive compared to historical levels.

As the impact of GST changes normalises, value of new business (VNB) margins are expected to improve.

Potential regulatory changes, such as the introduction of mandatory open architecture for banks, could pose risks, particularly for SBI Life.

While recent draft norms by the Reserve Bank of India have not mandated open architecture, any such move could impact bancassurance-led models.

SBI Life has maintained mid-teen growth with VNB margins of 26–28 per cent and a return on embedded value (RoEV) of around 19 per cent, supported by a low-cost structure and strong distribution.

ICICI Prudential Life reported VNB growth of 10.9 per cent in FY26, aided by improved product mix and cost efficiencies, though overall volumes remained muted.

HDFC Life saw a 2 per cent growth in FY26, with a decline in VNB in Q4. The company indicated that demand may remain weak in the near term.

Growth in retail protection and annuity products is expected to improve return ratios across insurers.

A better product mix, particularly a shift away from unit-linked insurance plans (ULIPs), along with recovery in volumes and margins, could support valuation upgrades across the sector.

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