Amid the GST rationalisation and ITC removal, how do you see the company’s performance in FY26?
In FY26, our individual rated premium (IRP) grew by 13.1 per cent, slightly ahead of both the overall industry and private sector averages. This continues our consistent track record of outperforming the industry over the past three to five years. On the profitability front, we achieved a value of new business (VNB) margin of 27.5 per cent, placing us towards the upper end of our guided range.
Overall, these outcomes are in line with the guidance we had set at the beginning of the financial year, reflecting both steady growth and disciplined execution.
After 13 per cent growth in FY26, what is your growth guidance for FY27?
In FY27, we are targeting IRP growth in the range of 13–14 per cent, which we expect to be slightly ahead of overall industry growth. Our focus remains on strengthening our position, both in terms of scale and consistent outperformance versus the industry. On the profitability front, we aim to maintain our VNB margins in the range of 26–28 per cent. With a well-balanced product mix and continued emphasis on cost optimisation, we are confident of delivering performance in line with these expectations.
You are a Ulip-heavy company. So, what will be the product mix you will target in FY27 amid choppy markets, and potentially tight monetary policy?
For the last two years, we have been trying to have a more balanced product mix by aggressively going ahead with non-Ulip policies. During the year, we have grown Ulip portfolio by 6 per cent, but the growth in other segments is higher than that, resulting in overall growth of 13 per cent. During the year, our Ulip mix has come down from 70 to 66 per cent. Going forward, we continue to guide our sales forces in the same manner. We are aiming for it be around 63 per cent in the current financial year.
How much has the GST rationalisation helped growth?
The impact has clearly been positive. H1FY26 was relatively subdued for both the industry and us, but growth picked up meaningfully from September onwards, coinciding with the GST changes. The rationalisation has improved affordability and enhanced the value proposition for customers. Earlier, protection products attracted 18 per cent GST, but with the exemption now in place, customers are effectively able to secure a higher sum assured for a lower premium outgo. This has made protection products more attractive and accessible, leading to a noticeable improvement in demand.
Is the impact of ITC behind the company now?
When GST was exempted from the life insurance industry, the ITC automatically was taken away. And, during the year, we have tried to cover that dent. It was a big dent on profitability. The company has to bear the entire GST expenses in its books; it is now part of the operational expenditures of the company. So, we have done various things like cost optimisation, improved product mix, improving profitability through selling more profitable products, etc. And, we have been able to largely contain the negative effect of ITC.
Would you be able to quantify it?
We had guided that the overall impact will be around 1.5 per cent of VNB, the one-time impact of GST and also the Labour Code regulations was somewhere around ₹873 crore for the company.
Have you also restructured your commissions to your distributors?
Our commission structure is already relatively lower compared to peers, and it has remained stable over the last couple of years. Given this positioning, we have not passed on the GST-related cost impact to our distributors.
While premium grew nearly 20 per cent in FY26, policy sales has seen only 1 per cent growth…
The ticket size is also a major player. We have seen that for some of our products, the average ticket size has gone up. But at the same time, protection products that we have launched has also seen a very good growth of 23 per cent during the year. Now, protection policies are much smaller in ticket size and they have given higher numbers. But they have been camouflaged by the higher ticket size in other line of businesses.
Do you think this trend of policy sales being in single-digit growth would continue?
We definitely want to increase the number of policies in FY27. Policy sales will be one of the focus areas for the company because looking at the large insurance gap, large number of people being uncovered. The only right way to go is to increase the number of policies. But at the same time, we must also acknowledge that the number of lives covered is also important. And group policies also cover a lot many people.
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