HDFC Life Insurance Company Limited announced its financial results for the quarter and nine months ended December 31, 2025, showcasing strong performance across multiple business parameters. The company demonstrated consistent growth in premium collection, profitability, and asset management while maintaining its market leadership position in India's life insurance sector.

Financial Performance Highlights

The company's financial metrics for the nine-month period reflect robust business momentum. Key performance indicators showed consistent growth across premium segments and profitability measures.

Asset Management and Value Creation

The company's asset management capabilities continued to strengthen during the period. Assets Under Management grew by 15% to ₹3,77,652 crores compared to ₹3,28,684 crores in the previous year. Indian Embedded Value increased significantly by 16% to ₹61,565 crores from ₹53,246 crores, demonstrating the company's enhanced value creation for shareholders. The Value of New Business grew by 7% to ₹2,773 crores.

Key Financial Ratios and Market Position

The company maintained healthy financial ratios despite some variations from the previous year. New Business Margins stood at 24.4% compared to 25.1% in the corresponding period last year. The solvency ratio remained strong at 180%, though slightly lower than the previous year's 188%.

Business Mix and Distribution Strategy

The company's product portfolio showed strategic shifts in business composition. The product mix by Individual APE demonstrated changes across different categories, with Unit Linked products comprising 43% compared to 37% in the previous year, while Non-par savings decreased to 19% from 35%. The distribution mix remained relatively stable, with bancassurance continuing to be the dominant channel at 59% of Individual APE.

Operational Metrics

Persistency ratios showed mixed trends, with 13-month persistency at 85% compared to 87% in the previous year, while 61-month persistency improved to 63% from 61%. The company maintained its market leadership with an individual weighted received premium market share of 10.9%, slightly higher than the previous year's 10.8%.

HDFC Life Insurance Company Limited reported business growth below its budgeted mid-teens new sales growth target during Q3, according to management commentary from the earnings call. The company posted net profit after tax of ₹421.00 crores for the quarter, marking a 1.00% increase from the previous year, though underlying growth excluding one-time impacts stood at 15.00%.

Financial Performance Overview

The company's Q3 performance was impacted by GST changes and labour code revisions. Revenue for the quarter reached ₹18,240.00 crores, representing an 8.57% year-on-year growth. Managing Director and CEO Vibha Padalkar explained that backing out GST and wage code impacts, the actual profit growth would be 15.00%.

Growth Performance vs Targets

During the earnings call, management acknowledged that business growth has been lower than the budgeted mid-teens new sales growth target. Individual annualised premium equivalent climbed 12.00% in the quarter, driven by significant growth in term insurance following GST exemption on individual protection plans. Term APE jumped 70.00% year-on-year, taking the share of protection in retail business to 11.00%, the highest achieved so far.

Strong Growth in Protection Business

The company maintained its market position as number two in the private space and number three overall, while gaining market share. For the nine-month period, retail protection business grew 42.00%, significantly ahead of the broader industry. Notably, 80.00% of customers buying term plans were new to HDFC Life.

Margin Impact and Recovery Strategy

Value of New Business margin declined about 200 basis points from a year ago to 24.00% in the quarter due to removal of input tax credit post GST exemption on individual life insurance policies. CEO Padalkar noted that excluding GST impact, margins would have been flat, and expects Q4 to perform better than Q3.

The company is implementing a multi-pronged strategy to neutralize GST impact, having already reduced it from an initial 300 basis points to about 190 basis points. The strategy includes distributor commission adjustments, cost rationalization, vendor renegotiations, and product mix optimization towards more profitable unit-linked products.