India's ICICI Life says tight cost control leaves it 'well placed' for commission changes (updated)

ICICI Life Insurance

13/10/2026 09:22

Rewrites throughout, adds comments from analyst call in paragraphs 3,4
By Nishit Navin
BENGALURU, Oct 13 (Reuters) - India's ICICI Life Insurance ICIR.NS said on Tuesday that its tight cost control made it "well placed" to navigate proposed regulatory changes to insurance commissions, after it reported a rise in second-quarter profit earlier in the day.
     In September, India's insurance regulator proposed overhauling commission rules to cap payouts and link them ​to product complexity, in an effort to curb costs that have ballooned since commission limits were relaxed in 2023.
Commissions are a major expense for life insurers and changes to the rules could affect their profitability and distributors' incentives to sell different types of policies.
"I think you should just look at our cost-to-premium metrics and you will see that we're very well-placed (to navigate commission changes)," ICICI Life CFO Dhiren Salian said in a post-earnings call. 
However, the company said it was too early to assess the full impact of the proposed changes, with the regulator yet to finalise the rules.
     ICICI Life's cost-to-premium ratio, which measures expenses including commissions as a share of premiums collected, excluding goods and services tax, fell 30 basis points year-on-year to 18.3% in the first half of the current financial year.
Its cost-to-premium ratio stood at 18.2% for fiscal year 2026, compared to 21.2% for larger peer HDFC Life Insurance HDFL.NS. HDFC Life Insurance will report its second-quarter results on Thursday.

MARGIN MISSES EXPECTATIONS
The insurer reported a 25% year-on-year rise in second-quarter profit to 3.74 billion rupees ($39.28 million) earlier on Tuesday, but its value of new business (VNB) margin fell to 25.4% from 26.7% in the preceding quarter, according to Reuters calculations.
The VNB margin fell short of analysts' expectations of 25.5% to 26.5%, according to estimates from at least five brokerages.
VNB, which measures the expected profit from new policies sold, rose 24.7% sequentially to 7.12 billion rupees. 
The shift towards higher-margin insurance products to offset pressure from the loss of tax benefits did not occur as expected. The share of higher-margin protection policies fell sequentially, while that of market-linked policies rose.
Annualised premium equivalent sales, a key measure of new business, rose 15.6% to 27.99 billion rupees, according to Reuters calculations.


   ($1 = 95.2200 Indian rupees)

 (Reporting by Nishit Navin; Editing by Rashmi Aich, Sherry Jacob-Phillips, Ronojoy Mazumdar, Janane Venkatraman and Sonia Cheema)
 ((Nishit.Navin@thomsonreuters.com;))