ICICI Prudential Life Insurance Company Ltd (ICICILIFE) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the ICICI Prudential Life Insurance Limited H1 FY 2027 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. I now hand the conference over to Mr. Anup Bagchi, MD and CEO of ICICI Prudential Life Insurance Limited. Thank you, and over to you.
Anup Bagchi (ICICI Prudential Life Insurance Limited): Thank you very much. Good afternoon, and welcome to the results call of ICICI Prudential Life Insurance Limited for the half year ended September 30th, 2026. I have several of my senior colleagues with me on this call. Siddharth Mitra, Chief Operating Officer, Amish Banker, Chief Distribution Officer, Dhiren Salian, Chief Financial Officer, Jeet, Chief Service Delivery, Manish Kumar, Chief Investment Officer, Souvik, Appointed Actuary, and Dheeraj, Chief Investor Relations Officer. As you are aware, the board has appointed Siddharth as the MD and CEO of ICICI Life for a tenure of 5 years beginning October 14th, 2026, subject to the requisite approvals. He has already assumed the role of CEO from October 6th, 2026. As my tenure as MD and CEO comes to an end today, I want to sincerely thank each one of you for the trust and support you have extended to me, not just at ICICI Life, but also over more than 3 decades with the ICICI group. I also extend my best wishes to my colleague, Siddharth, and I am confident that he will lead the company to continued success. Thank you very much. Now over to you, Siddharth.
Siddharth Mitra (ICICI Prudential Life Insurance Limited): Good afternoon, everyone. Thank you, Anup. It is truly a privilege to lead ICICI Life. Having spent over 28 years within the ICICI Group, the Group's values and DNA are deeply ingrained in me, shaped by experiences across diverse businesses over the years. ICICI Life is a resilient organization, supported by a strong leadership team, with deep domain expertise and a disciplined approach to steer the business. Customer centricity has always been ICICI Life's core ethos and this unwavering commitment will continue to guide every action we take. Our strategy remains unchanged: delivering sustainable VNB growth while balancing business growth, profitability and risk and prudence. Protection and annuity stay central to our strategy as they
Siddharth Mitra (ICICI Prudential Life Insurance Limited): significant underpenetrated niche in India. As we grow our protection business, we will continue to focus on increasing the sum assured in a sustainable manner. Our customer-focused product suite, well-diversified distribution network, innovative and customer first sales and service practices, industry-leading quality parameters and strong risk and capital metrics position us well to capture emerging opportunities. I'm stepping into this role at an important milestone. The company has been renamed ICICI Life Insurance Limited, strengthening our identity with brand ICICI that millions of Indians associate with trust, strength, and easy access to financial services. As we open this new chapter, our promise of making Har Pal Aasaan is firmly rooted in our customer-first philosophy. My endeavor will be to further strengthen the franchise, accelerate our momentum, and enhance value for all our stakeholders. I look forward to working closely with all of you. With that, I hand it over to Anish to take you through our business performance.
Amish Banker (ICICI Prudential Life Insurance Limited): Thank you, Sidharth. H1 FY2027 was marked by global macroeconomic uncertainty, driven by geopolitical tensions. While the Indian economy remained relatively stable, risks persisted from supply chain disruptions and elevated inflation. As a result, equity markets stayed under pressure with FIIs continuing to sell. Despite this external volatility, we delivered a strong and resilient performance with VNB growing by 22.3% to 12.83 billion in H1 FY2027 and margin stood at 26%. Total premium grew by 15.3% year-on-year to ₹245.05 billion. New business premium grew by 25% year-on-year to ₹118.21 billion, driven by 10.6% growth in the number of policies, reflecting the continued expansion of our customer base. Our business model is built on two pillars: protection business, which provides risk coverage, and savings business, which creates value through long-term management of customer funds. In H1 FY2027, our sum assured grew by 30.1% to ₹8.81 trillion, supported by a strong 39.5% year-on-year growth in protection APE. Our sum assured market share stood at 11.5%. Retail sum assured increased by 34.9% to ₹2.32 trillion, driven by robust year-on-year growth of 47.2% in retail protection. Recently, our flagship term plan, iProtect Smart Plus, has been awarded Product of the Year 2026-27 through NielsenIQ's consumer research, a reflection of our commitment to serve innovative and customer centric products. The overall protection mix increased from 19.3% in H1 FY2026 to 23.4% of APE in H1 FY2027. Consequently, the savings business mix moderated from 80.7% in H1 FY2026 to 76.6% in H1 FY2027. In the savings business, APE stood at ₹37.79 billion in H1 FY2027, registering a growth of 9.3% year-on-year. Within savings, annuity segment grew strongly by 50% year-on-year. Linked business grew by 6.6% year-on-year in H1 FY2027. This segment witnessed some softness, especially in the later half of Q2 as uncertain equity markets impacted investor sentiment. Our strategy in this segment continues to be on offering wealth creation solutions, which help navigate market volatility while achieving financial goals of the family. The non-linked savings business declined by 4.5% year-on-year in H1 FY2027. However, this business segment has seen a sharp recovery, with Q2 business being at a similar level to last year. Within the non-linked category, non-par mix has increased in Q2 as compared to Q1 FY2027. Group funds business grew by 48% year-on-year in H1 FY2027. Let me now take you through the channel-wise performance. Agency channel grew by 3.3% year-on-year in H1 FY2027 to 11.02 billion. The channel is on an improving trajectory with Q2 growth at 4.1% year-on-year. Direct channel grew by 10.9% year-on-year in H1 FY2027
Amish Banker (ICICI Prudential Life Insurance Limited): to 6.79 billion. Together, these channels contributed 46.1% to retail business in H1 FY 2027. As a strategic priority, within the agency channel, we continue to optimize product mix, which improves profitability and supports sustainable growth. By equipping agents with tools and analytics to automate administrative tasks, they can pivot their focus towards productive activities. As we go deeper into the micro markets, leverage data analytics and technology, we aim to drive higher productivity while ensuring our cost structures remain aligned with our evolving business mix. In the direct channel, our focus remains on scaling online business through differentiated customer offerings and digital capabilities and deepening our presence in the NRI segment through GIFT City. Bancassurance channel grew by 4.6% year-on-year in H1 FY 2027 and contributed 27.4% to APE. Partnership distribution channel grew by 34.1% year-on-year in H1 FY 2027 and contributed 14.8% to APE. Across both, our bancassurance and partnership channels, we remain focused on strengthening existing relationships and securing new alliances. Our strategy is to build on high-quality business, using mortality and persistency as core metrics to ensure long-term, sustainable value. Group business grew by 39.2% year-on-year in H1 FY 2027 and contributed 21.6% to APE. Today, we have the strength of 2.41 lakh-plus advisors, 52 bank partnerships with access to more than 27,000 bank branches, and 1,600-plus non-bank partnerships. To summarize, our focus will remain on leveraging our core strengths, a customer-centric, innovative product portfolio and a well-diversified distribution architecture enabled by strong sales and service capabilities. We will continue to strengthen the proprietary channel, execute our micro market strategy, and enhance both depth and breadth in multi-partner shops. Combined with our resilient business model, these initiatives will enable us to deliver sustainable, long-term growth through varying market conditions. I will now hand it over to Dhiren to take you through the regulatory and financial updates.
Dhiren Salian (ICICI Prudential Life Insurance Limited): Thanks, Amish. Let me start with the regulatory developments. IRDAI has released a public consultation paper on recalibrating economics of insurance distribution. This paper lays the groundwork for greater efficiency, fostering healthy competition and enhanced transparency across the insurance sector. Importantly, it places policyholders at the center of the reform agenda, aligning the insurance sector with the broader national vision of Viksit Bharat. Overall, the paper aims to strike a balance between expanding business opportunities and driving greater efficiency and productivity across the ecosystem. A key element in the recalibration is the recalibration of expense of management framework, with revised limits and a phased glide path to instill stronger cost discipline. As a company, we have been on our own efficiency journey over the last few years. We have consistently leveraged technology, digital tools and AI-driven initiatives to improve productivity and make our cost structure leaner and better aligned to the evolving product mix. Our operating expenses, excluding GST and stamp duty, have reduced at a CAGR of 8% over the last three years. A absolute 22% reduction in FY 2026 compared to FY 2023, which reflects the steady and deliberate progress that we have made. In the distribution space, the paper proposes an efficiency-oriented approach with differentiated commission caps. Becoming the most partnerable insurer has been a key strategic priority for us, and we will continue to leverage our proprietary PartnerStack platform to collaborate closely with our partners as these reforms take shape. We view these policyholder-focused reforms as a catalyst for growth and long-term value creation for all stakeholders, policyholders, distributors and our company. With a strong and resilient business model, we are well positioned to benefit from the significant insurance opportunity ahead. As these recalibrations take place, we expect the company to emerge even stronger, more policyholder-friendly, more productive, and significantly more efficient. Now, let me get to the financial updates. Starting with efficiency metrics. In H1 financial year 2027, 54% of our savings policies were issued on the same day, reflecting the progress we have made in straight-through processing and automation. Our cost-to-premium ratio, excluding GST, reduced by 30 basis points year-on-year to 18.3% in half-year 2027,
Dhiren Salian (ICICI Prudential Life Insurance Limited): cost to premium ratio excluding GST reduced by 90 per, 90 basis points year on year to 11.6% over the same period. This improvement is a direct outcome of productivity enhancements and disciplined cost management. Our claim settlement ratio remained industry-leading at 99.3 in half year 2027 with a average turn-around time of 1.1 days for non-investigated claims. Our early claim ratio stood at 23%, which is the best in class in industry, highlighting the high quality of business we have consistently sourced over the years. During H1 2027, we settled rupees 26.27 billion of death claims and paid rupees 86.34 billion in maturity and survival benefits. Underscoring our continued commitment to delivering timely timely financial protection and peace of mind to our customers. Customer retention also remained healthy with 13-month persistency at 84.5% in H1 2027. Our solvency ratio continues to be strong at 229.9% and assets under management stood at rupees 3.29 trillion at September 30th, 2026. We continue to maintain a track record of not having a single NPA since our inception. ICRA has reaffirmed the rating of our existing rupees 26 billion sub-debt program as ICRA AAA Stable. Profit after tax grew by 26.5% year on year to rupees 7.6 billion in half year 2027. Our focus is on growing the absolute VNB which has been demonstrated with a 22.3% year on year growth in half year 2027 to rupees 12.83 billion. VNB margin stood at 26.0%, an expansion of 130 basis points for from the full-year margin of 24.7 last year. As compared to full-year 2026, our product mix has moved favorably towards the protection business with sum assured registering a strong growth of 30% year on year in half year, thereby supporting value creation. Additionally, we kept working towards improving the profitability of each line of business through longer tenure of policies, higher sum assured multiples, and increasing rider attachment. Our embedded value grew by 12.2% year on year to rupees 566.69 billion at September 30th, 2026. Within the EV, the value of in-force business grew by 12% year on year to rupees 423.89 billion. Thank you, and we're now happy to take any questions that you may have.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of Swarnabh Mukherjee from 361 Capital. Please go ahead.
Swarnabh Mukherjee (361 Capital): Hi, sir. Good afternoon, and thank you for the opportunity. Three questions from my side. First of all, just wanted to understand the VNB movement. So, if you could give some color in terms of say both on year-on-year comparison as well as on a quarter-on-quarter comparison that you know say, year on year, how much product mix has helped the VNB movement vis-a-vis say, cost structure, etc., as well as the yield curve, how, how it has shaped up. And similar for, on a quarter-on-quarter basis, if you can highlight. Because I think on the overall protection side, particularly on the group protection side, on a quarter-on-quarter basis, there was some softness. So, if you could throw some color on that. And also on the cost to total premium number, sir, I think what I observed that when we look at the number inclusive of GST, it has gone up while ex of GST, the number has actually improved. So, is there any added element related to the GST changes that has kind of got factored in in this number in this current quarter? If you could highlight that. So, that would be my first question. Second is, sir, wanted some further clarity in terms of the draft regulations. I mean, when you are talking to your distributors and particularly given partnership distribution is one of our primary growth engines right now, what are the initial feedbacks you are getting in terms of how would the evolving landscape be, what people are thinking in terms of business growth, etc., if the regulation comes in this shape and form? Some comments on this will be fairly useful. And lastly, if you could give the split between par and non-par in the, in the
Swarnabh Mukherjee (361 Capital): Mix that we would expect
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