Non-life insurers seen holding up better than life peers

Mumbai: Indian insurers across the spectrum of services are expected to report rather circumspect fourth-quarter earnings, with a meltdown in equities in the aftermath of the Iran war wiping out investment gains for bulge-bracket institutional holders of stock, brokerages said.

Industry profitability is expected to be muted due to market conditions, Emkay said in a report. It said the nearly 14% decline in the Nifty 50 during Q4 and a 40-basis point rise in bond yields weighed 4-5% negative economic variance for private life insurers and 1% negative for Life Insurance Corp (LIC)-the biggest local institutional holder of stock.

The annualised premium equivalent (APE) in FY26 at life insurers would expand in high single digits. This slowdown in life insurance demand is partly driven by equity market volatility and rising yield expectations, which have dampened demand for ULIPs and non-par guaranteed products.

However, Axis Max Life is expected to lead followed by Life Insurance Corporation of India.

HDFC Life is expected to report single-digit APE growth, with traction balanced across savings products, while value of new business (VNB) margins are likely to remain stable at around 24.5%. ICICI Prudential Life may see higher single-digit growth, with VNB margins at about 24%.

SBI Life is likely to report high single-digit APE growth in the quarter, with FY26 APE growth estimated at around 14% year-on-year, impacted by a slowdown in ULIP sales toward the latter half of March amid volatile equity markets. Its VNB margins are expected to remain stable at around 27%. LIC is likely to report a relatively stronger 13% growth, aided by group business, with VNB margins around 20% as it continues to pivot toward non-participating products.

In contrast, general and standalone health insurers are expected to deliver robust growth. ICICI Lombard General Insurance is likely to report 10-12% growth in gross written premium, supported by motor and health segments, although commercial lines may see a slowdown. Its combined ratio is expected to remain broadly flat at around 102.6%, weighed down by higher expense ratios. Star Health and Allied Insurance is expected to post strong double-digit growth, aided by improved affordability following GST rate changes and normalisation of earlier regulatory impacts. Both claims and combined ratios are likely to improve.