Summary:
Market volatility weakened ULIP demand among Indian life insurers in H1FY27, with LIC reporting a 40% decline in ULIP APE. SBI Life and ICICI Prudential saw lower ULIP shares, while HDFC Life recorded an increase in its product mix.
Weak demand for unit-linked insurance plans (ULIPs) due to market volatility affected the product mix of several large life insurers in H1FY27. Customers are more cautious about buying market-linked insurance products as equity markets fall, foreign investors pull their money out and there is uncertainty about investment returns.
Why ULIP Demand Has Dropped
ULIPs give insurance cover for life along with investment in equity, debt or hybrid funds. They offer investment returns that are linked to the performance of the underlying investments, rather than a guarantyd benefit like traditional insurance products.
The Indian equity markets witnessed sharp ups and downs in 2026, due to foreign institutional selling, geopolitical tensions and rising crude oil prices.
The weakness dampened customer interest in market-linked products.
As of November 9, the Nifty 50 and the Sensex were trading lower by around 6% and 6.3% respectively in the year.
Lower equity prices can create opportunities for long-term investing, but add to uncertainty about near-term returns.
Lower demand for ULIPs could change the mix of new business in favor of traditional savings, protection and annuity products for insurers.
LIC’s ULIP business falls 40%
Life Insurance Corporation of India (NSE: LICI) reported a steep decline in ULIP sales in the first half of FY27.
Its ULIP annualized premium equivalent (APE) declined by about 40% YoY to ₹1,880 crore.
But the insurer’s overall business kept growing.
LIC’s individual APE was almost flat at ₹17,224 crore in H1FY27, against ₹17,170 crore a year earlier.
Total APE was ₹30,696 crore, a growth of 5.72% YoY, aided by the group insurance business.
The company’s net profit in H1FY27 grew 21.52% to ₹25,568 crore while value of new business grew 33.95% to ₹6,846 crore.
These numbers indicate that the dip in ULIP sales did not signify a contraction in the LIC’s insurance business as a whole.
Impact on private life insurance companies
Private life insurance companies generally have a higher exposure to ULIPs, making their product mix more sensitive to equity market conditions.
The numbers reported in H1FY27 are reflective of changes across major insurers:
| Company | H1FY27 APE | ULIP share H1FY26-H1FY27 |
| LIC (LICI) | ₹17,224 crore | ULIP APE fell 40% YoY |
| SBI Life (SBILIFE) | ₹11,750 crore | 57% → 51% |
| HDFC Life (HDFCLIFE) | ₹7,080 crore | 42% → 45% |
| ICICI Prudential Life (ICICIPRULI) | ₹4,935 crore | 48% → 45% |
APE figures and product mix are taken from the supplied newspaper chart. The percentages shown are ULIP shares of APE, not the change in total company revenue.
The figures suggest a non-uniform slowdown. HDFC Life saw growth in ULIP share while SBI Life and ICICI Prudential Life saw declines.
Why Life Insurance Stocks Are Under Spotlight
A poorer ULIP sales mix could impact new business growth, distribution revenues and insurer profits.
However, lower ULIP exposure does not necessarily mean lower income overall. Protection insurance, annuities and non-participating savings products have different profitability profiles.
LIC’s value of new business margin for H1FY27 improved to 22.3% up 470 basis points YoY despite weaker ULIP sales.
There is no evidence of verified stock prices to show a specific rise or fall in individual insurance shares due to ULIP slowdown.
Investors will continue to monitor APE changes, value of new business margins, persistency ratios and share of market linked products.
The recent bounce in Indian equities could help sentiment toward ULIPs, but actual sales growth will be dependent on customer demand.
For life insurers, it is important to have the right mix of protection, traditional savings and market linked products as market conditions change.
