HDFC Life Navigates H1 FY26 with Robust Growth and Strategic Adaptations

HDFC Life Insurance Company Limited has reported a resilient performance for the first half of fiscal year 2026 (H1 FY26), demonstrating strong growth in key metrics despite an evolving macroeconomic landscape and recent regulatory changes. The company achieved an individual Annualized Premium Equivalent (APE) of INR 6,470 crore, marking a healthy 10% year-on-year growth. This performance outpaced both the overall industry and the private sector, leading to a notable increase in its overall market share to 11.9% and private market share to 16.6%.

The company's renewal premium collections surged by 18% year-on-year, reflecting strong customer retention and the benefits of a growing backbook. Persistency ratios remained stable, with the 13th-month persistency at 86% and the 61st-month persistency at 62%, underscoring the quality of its business and customer experience. Profit after tax (PAT) for H1 FY26 rose by 9% year-on-year to INR 994 crore. The Assets Under Management (AUM), including its wholly-owned subsidiary HDFC Pension Fund Management, crossed the significant milestone of INR 5 trillion, highlighting its scale and financial strength.

The product mix for H1 FY26 remained well-balanced, with Unit-Linked (UL) products contributing 42% of the APE, participating products at 29%, non-par savings at 18%, term products at 7%, and annuities at 4%. This diversified portfolio allowed the company to cater to varied customer preferences and market dynamics. The retail protection segment was a standout performer, growing 27% year-on-year, significantly higher than the company's overall growth. New protection products, such as Click2Protect Supreme, were instrumental in this growth, offering comprehensive life, illness, and disability protection with flexible payout options.

Management acknowledged the impact of recent GST revisions, which led to a withdrawal of input tax credit and resulted in short-term margin pressure, affecting the new business margin. The new business margin for H1 FY26 stood at 24.5% post-GST impact. However, the company is actively implementing measures to neutralize this impact over the next two to three quarters through operational adjustments and close distributor engagement. Management anticipates a restoration of normalized VNB growth in FY27, primarily driven by top-line expansion, and expects VNB margins to normalize by the end of FY26.

Strategically, HDFC Life is focusing on expanding its reach into Tier 2 and 3 cities, which contributed significantly to new customer acquisition. Over 70% of new customers in H1 FY26 were first-time buyers with HDFC Life, indicating successful market penetration beyond metros. The company is also heavily investing in technology and digital transformation through initiatives like 'Project Inspire' to build a next-gen insurance platform and 'Gen AI initiatives' to enhance employee empowerment and operational efficiencies. These efforts are aimed at creating a future-ready organization that can leverage technology, digital tools, and analytics for sustainable growth.

HDFC Life's H1 FY26 performance underscores its ability to adapt to market changes while maintaining a strong growth trajectory. The company's disciplined execution, diversified product suite, and balanced distribution architecture position it well to capitalize on India's long-term savings demand and deepening protection mindset. Management's focus on neutralizing GST impacts, expanding into new geographies, and leveraging technology reflects a clear strategy for sustained profitability and shareholder value creation.