ICICI Prudential Life Insurance Company Ltd Management Discussions

The implementation of GST 2.07 on September 22, 2025, was the most significant domestic structural reform of FY2026. The 56th GST Council meeting simplified the previous multi-tier structure into a three-slab framework: a baseline 5% rate, a standard 18% rate, and a new 40% de-merit rate specifically targeting luxury and sin goods. In a landmark move for financial inclusion, life insurance products were exempted from indirect taxation to lower the cost of social security and encourage long-term savings. The weighted average GST rate declined to single digits, contributing to the sharpest and most sustained fall in consumer prices in Indias Consumer Price Index (CPI) series.

CPI inflation reached a historic low of 0.25%8 in October 2025, driven by food price corrections, a favourable monsoon and GST rate cuts. Core inflation (excluding food, fuel, energy, gold) also remained low at 2.76%. In January 2026, Indias national statistical office launched a new CPI series (revised base year 2024), which saw readings of 2.74%/3.21%/3.40% for Jan/Feb/ March 2026, reflecting revised household consumption expenditure weights.

RBI cut the repo rate by a cumulative 100 bps9 to settle at 5.25%9 in FY2026. While bank credit growth moderated for much of the year, impacted by tighter regulatory oversight on unsecured lending, and a rising NPAs in the microfinance sector, demand showed a strong recovery by March 2026. Systemic liquidity was maintained in comfortable surplus through record RBI Open Market Operation (OMO) purchases and forex swap operations.

1.1.2 Financial Markets

However, a sharp reversal set in through the fourth quarter of FY2026 where yields surged to over 7% in March 2026 propelled by global oil shock, an expanded state borrowing calendar, and rising U.S. treasury yields. Notably, monetary policy transmission remained partial, with commercial banks passing on only 40-50 bps14 of the RBIs 100 bps easing to lending rates.

The Indian equity markets experienced two distinct phases in FY2026. The first half was marked by robust momentum, with the Nifty 50 index15 achieving historic highs above the 26,300 level. This rise was underpinned by strong corporate earnings in Q1 and Q2 of FY2026, pivotal GST reforms, and fiscal stimulus through budget-led tax concessions, further supported by 125 bps of cumulative RBI easing since early 2025.

However, the trend reversed in the second half as the markets encountered significant global headwinds. Heightened geopolitical tensions in the West Asia led to a spike in crude oil prices in March 2026, which, coupled with weakening export demand, triggered a meaningful market correction. For the second consecutive year, Foreign Portfolio Investors (FPIs) remained net sellers in the equity market, with secondary market outflows totalling Rs. 3.15 trillion16. Consequently, the Nifty 50 and BSE Sensex concluded the fiscal year with annual declines of 5%15 and 7%15, respectively.

1.1.3 Financial Savings

Domestic savings in the Indian household sector demonstrated a 9% increase in FY2024, higher than the 6% growth seen in FY2023, though as a percentage of GDP it declined to 18.1% from 18.6%. Gross financial savings as a percentage of household savings, grew to 62.8% in FY2024.

1.1.4 Macroeconomic outlook

The RBI projects Indias GDP growth at 6.9%19 for FY2027, supported by the lagged consumption tailwind from tax cuts, the full-year impact of GST 2.0, and continued agricultural stability. The International Monetary Fund (IMF) projects Indias growth rate at 6.5%21 for FY2027, the fastest-growing major economy for the third consecutive year. RBI projects CPI inflation for FY2027 at 4.6%20, remaining comfortably within its target band. The rate cut cycle has almost ended with terminal repo rate being at 5.25%. Rate hikes are not imminent as it will hurt growth. While the baseline projections for FY2027 are robust, sustaining a growth trajectory of 7% or above is fundamentally contingent on two domestic variables: the acceleration of the private capital expenditure (capex) cycle and the outcome of the southwest monsoon. The outlook for India is bolstered by India-US interim trade deal, which serves to de-risk export challenges and strengthens Indias positioning as a major manufacturing destination. However, the risks cannot be ignored. The key global downside risks are, a sustained Strait of Hormuz closure that pushes crude above USD 120 per barrel widening the Current Account Deficit (CAD) by 60-80 bps, and possibly triggering domestic reflation; renewed tariff escalation under the weaker Section 122 authority of the U.S. Trade Act of 1974; and a U.S. recession that would simultaneously hit Information Technology (IT) exports, remittances, and FPI flows. Domestic risks include a below-normal monsoon (on the expectation of an early El-Nino expected), fiscal slippage if GST revenue foregone from rationalisation is not offset by formalisation gains and fertilizer subsidies/excise duty cuts, and the risk that rising global energy inflation forces the RBI to hike policy rates.

1.2Insuranceindustrystructureanddevelopments

1.2.1 Market Share

Currently, there are 26 life insurance companies in India. On Retail weighted Received Premium (RWRP) basis, Life Insurance Corporation of India (LIC) commands 28.0% market share and the top 5 private life insurance companies accounted for 48.5% market share in FY2026.

Market Share (RWRP)

On New Business Premium (NBP) basis, Life Insurance Corporation of India (LIC) commands 56.7% market share and the top 5 private life insurance companies accounted for 29.0% market share in FY2026.

Market Share (NBP)

On Sum Assured (SA) basis, Life Insurance Corporation of India (LIC) commands 18.7% market share and the top 5 private life insurance companies accounted for 50.9% market share in FY2026.

Market Share (SA)

1.2.2 Product Mix

The share of non-linked products increased for both private and overall sector in FY2025 as compared to FY2024.

Based on new business premiums; Source: IRDAl annual report

1.2.3 Distribution Trends

Bancassurance continues to be a predominant channel for the private life insurance sector in India. Direct sales channel through proprietary sales force and the online sales channel are fast gaining traction.

Based on individual new business premium; Source: IRDAl annual report

1.2.4 Contribution of the life insurance industry

In light of Indias current social security landscape, life insurance has become an essential societal necessity. It functions as a versatile financial planning instrument that secures a familys future with a reliable safety net, enabling them to achieve long-term objectives while maintaining a vital shield against lifes unpredictable events.

The Indian life insurance industry plays a key role in channelising household savings to the financial markets.

1.2.5 Regulatory updates and developments for FY2026

The Central Government of India notified amendments to the Insurance Act, 1938 through the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, with reforms to boost insurance sector by enhancing Insurance Regulatory and Development Authority of Indias (IRDAI) powers, improving regulatory oversight & increasing ease of doing business.

On the regulatory front, IRDAI had notified the obligations for rural and social sector business for FY2026 and FY2027 under the Master Circular on Rural, Social Sector and Motor Third Party Obligations, 2025. Further, IRDAI notified the Fraud Monitoring Framework Guidelines, 2025, which shall be effective from April 1, 2026, with the aim of to enhance the sectors resilience against fraud, foster a culture of integrity, protect policyholders interests, safeguard financial stability and maintain public trust. IRDAI had notified the implementation of Ind AS for insurance sector effective from April 1, 2026. To facilitate smooth transition, for insurers facing challenges in immediately shifting to Ind AS, a provision has been made to grant forbearance for one-year and accordingly, the Company has submitted its request for forbearance. Further, the Pension Fund Regulatory and Development Authority (PFRDA) notified an amendment to the PFRDA (Exits and Withdrawals) Regulations, 2015 revising limits to purchase of mandatory annuity for National Pension System (NPS) subscribers, including Government and Non-Government sectors. Further, the Digital Personal Data Protection (DPDP) Rules were also notified by Ministry of Electronics and Information Technology, providing details of procedures required for implementation and compliance.

1.3 Opportunities and Threats

1.3.1 Insurance under-penetration

The life insurance penetration, measured as a percentage of GDP, has increased from 2.1% in FY200225 to 2.7% in FY202526. At USD 72 in 2024, the insurance density26 (premium per capital) in India remains very low as compared to global average of USD 388. The macroeconomic factors such as strong economic growth, increased participation from private players, increasing disposable incomes coupled with Indias demographic factors such as a growing middle class, young insurable population and growing awareness of the need for protection and retirement planning would continue to aid the growth of the Indian life insurance sector.

1.3.2 Favourable demographics

According to the United Nations estimates, the working population is expected to increase by 14% by the year 2034. With a median age of 28 years, India has a very young population. Both these factors are likely to fuel demand for life insurance products.

Population of age 25-59 years (in million)

1.3.3 Increasing urbanisation

According to United Nations population division estimates, Indias urban population is expected to increase by 24.3% by the year 2035. Increased urbanisation is likely to lead to an improvement in the standard of living and provide better access to financial products such as life insurance.

Estimated Urban Population in India (in million)

1.3.4 Financial savings

India has a large pool of household savings and in FY2024, the ratio of household savings to GDP stood at 17.9%. The share of gross financial savings as a proportion of household savings was 63.6% in FY2024. The share of life insurance as a proportion of financial savings (including currency) in India was 15% in FY2025.

1.3.5 High protection gap

According to Swiss Re, the mortality protection gap for India is at USD 16.5 trillion which is relatively high compared to the rest of the world. Protection coverage ratio which is the ratio between protection lacking and protection needs is also very high for India. Only 13%27 of the addressable population is covered by retail protection policies in India. This provides a significant opportunity for Indian life insurance companies to address this gap and expand their protection business.

Group term segment is also expected to grow over the long-term as businesses continue to scale-up and the employee base continue to expand given sustained economic growth.

Retail credit has been growing at a CAGR of 17.5% from FY2014 to FY2025. Sustainable growth in credit provides an additional opportunity for the industry through the credit life business by providing mortality and morbidity cover to borrowers.

1.3.6 Pension opportunity

Indias pension penetration is one of the lowest in the world with pension assets to GDP ratio at 6.9% in FY2025. The current average life expectancy for India in 2025 is 72.4 years of age. This was a 0.27% increase from 2024, when the average life expectancy was 72.2 years. In the future, Indias average life expectancy is projected to increase to 85.2 years of age by the year 2100, an increase by 18% from todays standard. This positive trend can be attributed to technological advancements, a better standard of living, and an increase in healthcare availability.

According to the India Ageing Report 2023, there are 149 million persons aged 60 years and above in 2022 (as on July 1), comprising around 10.5% of the countrys population. By 2050, the share of older persons will double to 20.8%, with the absolute number at 347 million. Only 23% of this population are either saving or planning to save for their retirement. This leaves 77% of Indians potentially dependent on their children which is likely to create a significant deficit with the joint family system giving way to the nuclear family system. Additionally, with an increase in life expectancy, the post-retirement period for males has increased from 17 years during FY2000-FY2005 to 19 years in FY2012 and is further expected to increase to 20 years in FY2030. Given that the annuity product can be offered only by life insurance companies, it offers a significant business opportunity for the life insurance industry. While people may look at alternative ways to save for retirement, only an annuity product can provide a guaranteed income for life and hence should take priority in an individuals retirement planning process.

During 2000-2022, the total population of the country grew by 34%, while the population of 60+ years grew by 103%. The population growth of older persons aged 80+ years has been even higher at 128% during the same period. Projections indicate that during 2022-2050, the overall population of India will grow by 18% only, while the older population will grow by 134%.

1.4 Strategy and performance of the Company

The Companys key objective is to create value for the customers, shareholders, employees, and all other stakeholders. Its "3C framework" of Customer Centricity, Competency, and Catalyst helps deliver sustainable VNB growth by balancing business growth, profitability, and risk and prudence. Also, ESG aspects have been integrated into the management of Companys business throughout the process.

The Company is committed to delivering exceptional customer value by leveraging its core strengths, which include an extensive product range, a frictionless on boarding process, a varied distribution network, and top-tier service and claims processing. To fully capitalise on these competencies and enhance the customer journey, the Company strategically integrates its people, technology, and analytics.

The strategic alignment of the Companys business objectives with its people initiatives, coupled with sustained investment in training, has transformed its human capital into a definitive pillar of strength and a primary competitive advantage. The focus of its essential people mandates has been to structure the organisation for risk-managed, profitable expansion; establish peak capacity via targeted talent acquisition and rigorous onboarding; and cultivate capabilities for a future-ready workforce with significant skill depth. Furthermore, these efforts aim to strengthen strategic and cultural cohesion. They are anchored in an employee value proposition that guarantees a supportive environment, continuous learning opportunities, and a culture of fairness and merit-based advancement.

Business growth, innovation, core roles, and centres of excellence are bolstered through augmented capacity and capability, which is underpinned by a robust development framework; this framework encompasses structured learning interventions, on-the-job training, sales certifications, skill mapping, professional certifications, job rotation, job enrichment, management development programs, and self-paced virtual learning platforms. Alignment between the Companys business and people strategy and the consistent investment in the growth and development of its employees helped the Company make its human resources a definitive source of strength and a key competitive advantage. The focus of its key people imperatives has been to enable profitable growth with quality, embed risk and prudence, and deliver the employee value proposition anchored on the Cornerstones of providing a Supportive Environment, enabling Learning & Growth and ensuring Fairness & Meritocracy.

Based on business requirements, continuous measures are undertaken to maintain a ‘fit-for-purpose structure guided by principles of role calibration, optimal spans, fungibility of roles and sharper accountability which is aligned to long-term value creation. This is supported with a capability development framework enabled through learning interventions, on the-job training, sales certifications, skill mapping and professional certifications, job rotation, job enrichment, management development programs and self-paced virtual learning platforms.

A well-defined performance and talent management system ensures alignment to the Companys KPIs and clarity of purpose across levels helps create a talent pipeline by nurturing high potential talent and is a key input for rewards to help ringfence talent for the future. Key elements of the culture include aligning employees to key organisational initiatives, listening to employees and amplifying ground realities for faster and agile decision making, emphasising right behaviour conduct and encouraging employee wellbeing and inclusion through comprehensive frameworks.

The people strategy has enabled the Company to have leadership stability, with 77% of the senior management team having served the Company for more than ten years, leadership depth with 92% of senior management having done more than 3 job rotations28, and senior management cover with 90% of key positions at leadership levels having adequate leadership cover. At its core, Sustainability is the foundation of the Companys customer-centric strategy. The Company is dedicated to providing families with a robust financial safety net while empowering them to reach their long-term financial milestones. The Company remains steadfast in its commitment to embedding Environmental, Social, and Governance (ESG) principles into its core business processes. To drive its sustainability agenda, the Company operates under a Board-approved ESG framework that provides clear strategic direction for all initiatives. Continuous stewardship of this framework is executed by the Board Sustainability and CSR Committee. The Committee is also responsible for reviewing sustainability activities and key ESG-related disclosures. Under the Board Committee, there is an Executive Sustainability Steering Committee which comprises members of the management committee supported by a dedicated ESG resource. This Committee sets the ESG agenda and reviews progress.

The Company has specific initiatives in place for each element of the ESG framework under Environment (leaving the planet a better place for the next generation), Social (giving back to society), and Governance pillars (transparency in functioning). Each focus area is steered by a senior leader who oversees the implementation and reporting of the initiatives, and they are backed by a dedicated ESG resource.

To ensure our strategy remains aligned with market needs, we actively engage with investors and analysts to integrate their expectations into our framework. Furthermore, an external assurance partner has verified our key sustainability metrics, confirming the datas credibility, relevance, and reliability.

The Company believes that this 3C framework centred on Customer centricity, Competency, and Catalyst along with integrating Environmental, Social, and Governance (ESG) is uniquely positioned to capture the vast insurance opportunities in India. Supported by a facilitative regulatory environment, this cohesive strategy remains focussed on driving sustainable VNB growth by balancing business growth, profitability, risk and prudence.

Customer centricity

The Company aims to deliver superior customer value and experience through appropriate product propositions, seamless onboarding and sourcing, best-in-class service, and settling claims with utmost sensitivity and care.

To achieve this, the Company endeavours to provide frictionless digital onboarding and 24/7 assistance for maximum convenience. Furthermore, in FY2026, approximately 50% of savings policies were issued on the same day, while about 58% of policies were logged for using digital KYC. The Companys claim settlement ratio stood at 99.3%, achieved with an average turnaround time of 1.1 days in FY2026, demonstrating the Companys commitment to stand by its customers and their families when it matters the most.

The Company has a best-in-class early claims settlement ratio of 22% with a healthy 13th month persistency ratio of 84.5%. The Company was conferred with ‘The Best Customer Oriented Company by ICC Emerging Asia Insurance Awards.

Competency

The Company continues to leverage its core strengths: a comprehensive product suite, an extensive distribution network and superior operational efficiency. It endeavours to provide the right product to the right customer and offer innovative product propositions addressing dynamic customer needs across life stages. The Company continues to understand customer needs and map right product accordingly. The Company offers products to a large customer base spread across various income segments & geographies. Recent product offerings, among others include a legacy plan that helps build long-term corpus (ICICI Pru Wealth Forever), a plan to secure a childs future milestones (ICICI Pru Smart Kid 360), a USD denominated plan that helps NRIs diversify beyond a single country (ICICI Pru Global Wealth Multiplier) As a part of the Companys objective to build a diversified distribution the Company endeavours to: Invest & grow in proprietary channels, create depth & width in multi partner shops, deeper penetration in micro markets and be the most partnerable insurer.

By deepening distribution, it intends to gain access to a wider range of customer profiles, which enhances the ability to seamlessly shift between product segments as per macro-environment.

As a result of the Companys efforts towards investing in building distribution capacity, the Company has a diverse set of distribution channels with more than 242,000 agents spread across geographies, partnerships with 53 banks and access to more than 26,400 bank branches and 1,500 non-bank partnerships in an effort to deliver value propositions to a diverse set of customers spread across geographies.

The Company also focusses on differentiated strategy for each of the distribution channels and for each micro-market by understanding the texture and clusters within the micro-market, mapping channel & distribution presence and considering local and regional preferences in marketing initiatives. The Company has also developed ICICI Pru Stack, a set of platform capabilities which empowers the Companys distribution partners with customer segmentation, identify cross and upsell opportunities to offer the right product to the right customer.

The Company is committed to enable simplified & frictionless processes across policy life cycle. By leveraging external data sources for KYC29, financial underwriting through ecosystem enablers, advanced underwriting and integration with new-age payment technologies the Company has simplified the onboarding process. The Companys claims philosophy & framework entails easy accessibility & sensitive handling, proactive communication, settlement of genuine claims expeditiously and zero tolerance for fraud. The Companys customer communication framework helps address customer anxiety and reinforce trust and guardianship.

Catalyst

The Companys key to unlock true potential of its competency and improve the overall customer experience is through the three catalysts namely People, Technology and Analytics.

The Company endeavours to create ‘people edge through learning & development, supporting environment and fairness & meritocracy. The Company continues to build capacity for risk calibrated profitable growth, nurture capability to build skill depth, and foster cultural and strategic alignment. 77% of leadership team have more than ten years of vintage. 92% of leadership team have done more than 3 job rotations. 90% of leadership positions have adequate cover.

The Company endeavours to enhance customer experience while supporting sales & distribution. The Company continues to leverage ‘technology to deliver value through its mobile application. Digital services handled ~92 million+ interactions FY2026. The Companys app has over 4.8 million downloads and 96.8% service interactions are via self-help/digital modes. The Company enables technology right from pre-sales, onboarding & issuance, partner integration to customer service and claims.

The Company endeavours to utilise ‘analytics by embedding AI/ML30 across the customer journey: driving targeted demand generation, automated underwriting, improved renewal retention, enhanced customer service, and effective claims investigation.

Extensive utilisation of artificial intelligence driven analytics across sales, onboarding, servicing and claims by leveraging Gen AI, machine learning and deep learning. This has enabled the Company to increase upsell, enable higher agent activations, improve collection efficiency, fraud mitigation, reduce misselling, enable faster claims TAT and reduce fraud risks.

The 3C strategic elements are aimed at helping the Company deliver sustainable VNB growth by balancing business growth, profitability and risk & prudence. The Company strives to deliver superior customer value through its core competencies of comprehensive product suite with seamless on boarding and sourcing via diversified distribution network and best-in-class servicing and claim settlement. The Company endeavours to strategically leverage the synergies of people, technology, and analytics to fully realise its core competencies and enhance the overall customer experience. The Company believes that this 3C framework is appropriate in the context of the large insurance opportunity in the country, a facilitative regulatory regime and coupled with the objective to grow absolute VNB.

Business Growth

The Company is focussed on further strengthening its leadership position amongst Indias top private sector life insurance companies and gain new business premium market share and overall sum assured market share. The Company is committed to offering right products to the right customers and delivering them through the right channel. By leveraging its strong brand, continuous product innovation and well-diversified distribution, it is confident to deliver sustainable business growth.

Enhancing Distribution

The Company continuously works at strengthening its distribution network by closely aligning distribution verticals with specific customer needs and products. Acquiring new partners and investing in innovative sourcing channels also remain key focus areas. Further, the endeavour is to drive business growth through micro market strategy. By deepening distribution, the Company intends to gain access to a wider range of customer profiles, which enhances its ability to seamlessly shift between product segments as per the prevailing macro environment. This strategy helps the Company keep product and channel mix balanced and deliver sustainable growth irrespective of the market environment.

Expanding Protection Business

Protection business remains a core priority. Retail protection segment offers a multi-decadal growth opportunity due to the current under-penetration, further complemented by GST reforms effective September 2025. Significant opportunities also lie in the credit life and group term segments as the economy expands. Additionally, the Company will continue to address retirement saving needs. The Company also has product innovation as a core focus of its business strategy. It continues to build on its legacy of innovation to meet the evolving needs of the customers through continuous innovation and expansion of its product portfolio and thereby broadening the customer base.

Channels

Profitability

The Company endeavours to achieve its core objective of growing absolute VNB while delivering value to our customers. It also continues to work towards aligning its cost structure commensurate with the prevailing product mix.

Cost-to-premium ratio for the savings line of business reduced by 40 basis points from 12.5% in FY2025 to 12.1% in FY2026. The reduction in cost ratios is a result of the various cost optimisation initiatives undertaken in the past two years to make the cost structure aligned to the prevailing product mix. The cost reduction is after accounting for unavailability of input tax credit, effective September 22, 2025. Total cost-to-premium ratio for FY2026 stood at 18.2% and remained stable at previous years levels.

The Companys solvency ratio at March 31, 2026 was 227.3%, well above the regulatory minimum required level of 150%.

Risk and Prudence

The Company continues to imbibe risk & prudence across organisational culture, sales & processes through robust governance. Risk management is an integral part of the Companys ecosystem with focus on right selling, right sourcing and right onboarding. Its robust risk management architecture is exhibited in its strong and resilient balance sheet.

1.5 Company outlook

Over the past few years, the life insurance sector has undergone a significant transformation. As the needs of consumers evolve, the way forward for the industry is being reshaped by a mix of new technologies, demographic transitions, and ever-changing market dynamics. Although the industry has grown significantly over the last two decades, there remains substantial potential for further expansion and increased market penetration. Strong economic growth, favourable demographics, increasing disposable income and life expectancy coupled with rising awareness of financial & retirement planning will lead to long-term sustainable growth for the life insurance industry.

There are four broad areas which offer significant opportunities to the Company. The large protection gap in India coupled with a low sum assured to GDP ratio suggests significant opportunities for the protection business. Retail credit growth provides further opportunity for the credit protect business. These elements present the protection segment, which is also the core focus area of the Company to be a strong multi-decadal growth opportunity. The lower penetration of the pension market in India also gives a long runway of growth for the annuity business. Given that the annuity product can be offered only by life insurance companies, this offers a significant business opportunity for the industry.

Through various customer awareness initiatives, the Company expects to drive continued improvement in persistency and quality parameters that will ultimately help customers get the intended benefits from their policies. Use of AI/ML, which is being embedded across the entire customer journey, helps in driving targeted demand generation, automated underwriting, improving renewal retention, enhanced customer service and effective claims investigation. Upsell programs and digital lead conversion, both supported by Machine Learning models, continue to contribute to growth, while advanced fraud detection and early claims identification help mitigate risk and improve profitability. The Company has also deployed AI-led face matching between KYC documents and customer images to reduce fraud risk. Gen AI-based categorisation of incoming customer e-mails has significantly improved turnaround times and AI-driven medical summarisation is enabling faster and more efficient underwriting decisions.

Customer-centricity continues to be at the core of the strategy. The Company will continue to work on its strengths, that is product leadership, extensive distribution network, and business excellence aided by building blocks of people, digitalisation and analytics. The Companys products, process, and distribution are completely aligned with one goal, that is to deliver value proposition to the customers. By offering the right product to the right customer and deliver it through the right channel, the Company aims to deliver sustainable VNB growth by balancing business growth, profitability and risk and prudence.

1.6 Risks and concerns

Indian life insurance industry is highly competitive with 26 companies operating in the market. Indian consumer demands are changing continuously which requires companies to modify their offerings in alignment with customer needs. This poses an opportunity as well as risk to the industry as inability to meet the consumer demand would hamper the growth.

Some of the macroeconomic and policy factors which could be risks for the industry are:

The Company recognises that risk is an integral element of the business and controlled administration of risk is essential for generation of Shareholder value. The Company has instituted an enterprise risk management framework which details the governance and management of all aspects of risks. A detailed review of the Companys risk exposures to market, credit, liquidity, insurance, operational, reputation and other emerging risks, as well as the key control processes is set out in the ‘Enterprise Risk Management section of this Report in page 209

II. DISCUSSION ON FINANCIAL PERFORMANCE AND ANALYSIS OF FINANCIAL STATEMENTS

A. Overview of Lines of Business (LOB)

The Company operates in various lines of business in retail and group segment. A brief description of the products under each line of business is given below:

a. Non-participating life: Non-participating savings – Non-participating savings plans are endowment assurance contracts that pay a benefit upon the life assured surviving the stipulated date or on the life assureds death before maturity. These plans meet the long-term savings needs of customers and the life cover component ensures that the customers family is financially secure. Non-participating protection – Non-participating protection plans are contracts that pay a specified amount on the occurrence of certain events such as death, disability or critical illness during the policys term. These cost-effective protection plans provide a 360-degree financial safety net to customers and their families by paying a lump sum amount or regular income for a specified period when an event covered under the product occurs.

b. Non-participating pension – These products help customers build a retirement corpus and pay a specified benefit from time to time. c. Non-participating variable (Life & Pension) – These products offer benefits that are partially or wholly dependent on the performance of an approved external index or benchmark.

d. Annuity – Annuities provide a series of guaranteed payouts to the annuitant at regular intervals in return for a certain sum paid upfront or the option to pay premiums for a certain period. A deferred annuity is a contract to payout regular amounts of benefit to the annuity holder at the end of the deferred period (the vesting date) when annuity payment commences for a specified period such as number of years or for life. An immediate annuity is a contract to pay out regular amounts of benefit wherein the contract commences payments immediately after commencement of the contract.

e. Health – These products provide a fixed benefit on specified health events such as the diagnosis of a specified illness.

These products provide returns that are directly linked to the performance of an approved index or the value of the underlying assets. The investment risk in these products is borne by the policyholder. The products have a transparent charge structure, including the charge for either life cover or health cover. Any surplus that arises in the case of non-participating linked business is transferred to shareholders accounts based on the recommendation of the Appointed Actuary. The Company has linked life, pension, health, and group line of business.

B. Standalone financial statements

a. Results from operations:

The Companys financial statements comprise two primary accounts - the Revenue account (also known as the policyholders account) and the Profit and loss account (also known as the shareholders account). The Revenue account contains the income and expenses related to policyholders, and the surplus generated in this account is appropriated to the Profit and loss account based on the recommendation of the Appointed Actuary. A deficit in any line of business in the Revenue account is funded from the Profit and loss account. Other than the transfers to and from the Revenue account, the Profit and loss account contains the income and expenses pertaining to shareholders. The surplus remaining in the Revenue account, which has not been appropriated to the Profit and loss account, is held as Funds for future appropriations (FFA) and is reflected in the Balance Sheet. Funds for Future Appropriation represent funds that have not been explicitly allocated to either policyholders or shareholders at the balance sheet date.

The various lines of business disclosed in the Revenue account are as per the requirements of IRDAI regulations. However, for analysis of our Revenue account, it can be viewed from three broad lines of business as given above i.e., participating, non-participating (including non-participating life (savings and protection), non-participating pension, non-participating variable life, non-participating variable pension, annuity, health) and linked. Shareholders profits in participating lines of business depend on the total annual bonuses declared to policyholders.

Currently, one-ninth of the bonus declared to policyholders is transferred to shareholders. In the non-participating line of business, profits arise primarily from premium and investment income net of expenses, claims, and policyholders liabilities. In the linked business, profits primarily arise from charges levied on the policyholders fund net of expenses, claims, and policyholders liabilities.

Components of various tables in this note may not add up to their totals due to rounding off.

Segment-wise performance of Companys Revenue and Profit and loss account: Revenue account (Policyholders account)

1 Includes balance of variable insurance products.

2 Net of any impairment in investments, which is shown as provision/(reversal) for diminution in the value of investments in the Revenue account. 3 Contribution from the shareholders account towards remuneration of MD/CEO/WTD/Other KMPs 4 Commission also includes rewards and/or remuneration to agents, brokers, or other intermediaries 5 Including provision for doubtful debt and bad debts written off.

6 Indicates transfer to/(from) shareholders account including deficit funding

Profit and Loss account (Shareholders account)

1 Net of any impairment in investments, which is shown as provision/(reversal) for diminution in the value of investments in the Profit and loss account, and excluding other income

Element-wise analysis of the Revenue account and Profit and loss account is given below:

The following table sets forth, for the periods indicated, the summary of gross premium income:

1 Group includes policy sourced to group customers under par, non-par, and linked lines of business.

The following table sets forth, for the periods indicated, summary of income from investments:

Contribution from Shareholders account represents the funding from the Profit and loss account (Shareholders account) to various lines of business in case of a deficit in any line of business (except participating) and also includes expense of management in excess of allowable limit in participating and non-participating (including linked) business segment (Refer note 3.51 of schedule 16).

The following table sets forth, for the periods indicated, summary of commission expense:

1 New business commission ? (First Year premium + Single premium) 2 Renewal commission ? Renewal premium

The following table sets forth, for the periods indicated, summary of operating expenses relating to insurance business:

The following table sets forth, for the periods indicated, summary of benefits paid:

1 Includes interim and other bonuses paid.

10. Change in valuation of policy liabilities (Revenue account)

The following table sets forth, for the periods indicated, summary of the changes in valuation of policy liabilities:

11. Provision for taxation (Revenue account)

12. Surplus after tax (Revenue account) and Net transfer to shareholders account

Segment-wise net transfer to shareholders account is as under:

13. Investment and other income (Profit and loss account)

The following table sets forth, for the periods indicated, summary of income from investments:

14. Expenses other than those directly related to insurance business (Profit and loss account)

15. Provision for tax (Profit and loss account)

16. Profit after tax (Profit and loss account)

b. Financial position

The following table sets forth, for the periods indicated, the financial position of the Company:

The following table sets forth, for the periods indicated, the details of shareholders fund of the Company:

The Company had a solvency ratio of 227.3% at March 31, 2026, compared to the regulatory minimum required level of 150%.

Further, the Company has been identified as a Large Corporate as per the criteria under the SEBI circular SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172, whereby the Company shall raise not less than 25% of its incremental borrowings by way of issuance of debt securities. (Refer note 3.24 of schedule 16)

Fair value change account and revaluation reserve – investment property

Policy liabilities

The following table sets forth, for the periods indicated, summary of policy liabilities:

The movement in policy liabilities is explained in the element-wise analysis of the Revenue account.

Funds for future appropriation (FFA)

The following table sets forth, for the periods indicated, summary of funds for future appropriation:

Linked FFA is created as per the requirements of as per the IRDAI Master Circular on Actuarial, Finance and Investment Functions of Insurers, IRDAI/ACTL/ CIR/MISC/80/05/2024 dated May 17, 2024.

The following table sets forth, for the periods indicated, summary of investments:

The increase in policyholders non-linked investments is largely attributable to net inflows into the fund. In case of assets held to cover linked liabilities, the downward movement is primarily attributable to net outflows and unrealised losses due to equity market performance during the year.

The investment held in unit linked funds (assets held to cover linked liabilities) at March 31, 2026 was 49.0% of the total investment assets as against 53.0% at March 31, 2025. Further, of the total investment assets at March 31, 2026, 40.7% of the assets were held as equity at March 31, 2026 as against 45.0% at March 31, 2025.

7. Net current assets (i) Details of current assets

The following table sets forth, as on each reporting date indicated, summary of current assets:

The explanation for key elements is as mentioned below:

(ii) Details of current liabilities

The following table sets forth, for the periods indicated, summary of current liabilities:

The explanation for key elements is as mentioned below:

Payable to agents represents the amount payable to insurance agents, brokers, insurance marketing firms and web aggregators towards commission. The amount outstanding is primarily attributable to the business sourced during the last month of the financial year.

c. Cash flow statement

The following table sets forth, for the periods indicated, a summary of the cash flows:

Cash flows from operating activities:

Cash flows from investing activities:

Cash flows from financing activities:

d. Key financial ratios

The following table sets forth, for the periods indicated, the key financial ratios excluding the ratios that are mentioned in the above sections:

Persistency ratio: The Company has a strong focus on improving the quality of business and customer retention. Our 13th month persistency ratio stood at 84.5% for FY2026. The 49th month persistency ratio stood at 71.8%.

Expense ratio: The cost to premium ratio stood at 18.2% in FY2026 compared to 18.1% in FY2025 primarily on account of disallowance of GST input credits pursuant to changes in the tax regime with effect from September 22, 2025.

Solvency ratio: The Company had a solvency ratio of 227.3% at March 31, 2026, compared to the minimum regulatory requirement of 150%.

Basis of consolidation

These consolidated financial statements for the Group are prepared in accordance with the principles and procedures for preparation and presentation of consolidated financial statements as laid down under the Accounting Standard (AS) 21, ‘Consolidated Financial Statements and are presented in the same format as that of the Company. The financial statements of the Company and its subsidiary have been combined on a line by line basis by adding together similar items of assets, liabilities, income and expenses in respective components of financial statements after eliminating intra-group balances, transactions and resulting unrealised profits/losses.

During the year, the Company disposed its entire shareholding in its subsidiary with effect from January 12, 2026, resulting in loss of control over the subsidiary. Accordingly, the financial statements of the subsidiary have been consolidated up to the date of which control ceased. From that date, the subsidiary has been deconsolidated and the resultant gain or loss on disposal has been recognised in the consolidated profit & account. The Policyholders account specifically dealing with direct insurance business governed by IRDAI regulations has retained its distinct independent form in these consolidated financial statements.

III. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The internal controls of the Company are commensurate with its business requirements, its scale of operations and applicable statutes to ensure orderly and efficient conduct of business. These controls have been designed to provide a reasonable assurance with regard to maintaining proper accounting controls, safeguarding of assets, prevention, and detection of frauds and errors, ensuring operating effectiveness, reliability of financial reporting, and compliance with applicable regulations.

The Company has a mechanism of testing these controls at regular intervals for design and operating effectiveness. Further, the auditors opine on the adequacy and operating effectiveness of internal financial controls over financial reporting.

The key components of the internal financial control framework include:

These controls are covered under the IFC framework which is aligned with Internal Control Framework 2013 given by the Committee of Sponsoring Organisations (COSO) of the Treadway Commission and tested at regular intervals for design and operating effectiveness.

There had been no material changes in the process level controls or activities conducted in the financial statement closing process of the Company. The Company had tested all material controls over financial reporting during the financial year and found them to be operating effectively.

In addition, internal audits are undertaken to reviews significant operational areas regularly. The Audit Reports, submitted by the Internal Auditors, are reviewed by the Audit Committee and corrective action is initiated to strengthen the controls and enhance the effectiveness of the existing systems. Statutory and Internal Auditors are also invited to the Audit Committee meetings to ascertain their views on the adequacy of internal control systems. and to keep the Board of Directors informed of material observations, if any. The management believes that strengthening internal controls is a continuous process and it will, therefore, continue its efforts to keep pace with changing business needs and environment.