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On expected lines, the life insurance industry reported weak performance during Aug-25, with retail APE declining 0.6% largely due to LIC reporting a 5.1% YoY decline and partially offset by the private sector posting a muted 1.3% growth. The lackluster growth in Aug-25 was owing to i) continued impact of new surrender regulations driven by product and channel adjustments; ii) Ganesh Chaturthi-led festivities impacting the business in the western and central parts of India; and iii) floods in northern India. On a 2Y CAGR basis, the industry witnessed ~4.7% Retail APE growth, with the private sector growing 7.8% and LIC reporting a 2.1% decline. YTDFY26, the industry’s Retail APE grew 4.8%, primarily driven by ~8% growth in the private sector while LIC posted a 2.4% decline. Among private listed players, Axis Max Life continued to top the charts, clocking a strong ~16% retail APE growth albeit led by some support from the monthly ULIP policies. HDFC Life reported a flattish 0.7% retail APE growth during Aug-25. SBI Life witnessed a ~4% decline in Retail APE, whereas IPRU posted a ~15% decline in reported retail APE. In Aug-25, Group APE for the industry clocked a strong 29% growth (private sector: up 79%; LIC: down 6%), resulting in 6.6% APE growth (private sector: up 11%; LIC: down 0.2%). Overall, with the impact of the H1FY26 high base, of GSTrelated changes, and of Diwali festivities, the weak performance is likely to continue till Oct-25. With growth expected to pick up in H2FY26, we expect the industry to deliver ~11-12% retail APE growth in FY26, backed by the private sector growing ~13-14% and LIC expected to grow ~6-7%.

Industry reports weak performance for Aug-25

The Life insurance industry reported a weak performance during Aug-25, with the retail APE declining 0.6% (LIC: down 5.1% YoY; Private: up 1.3% YoY). Group APE for the month grew a strong 29%, primarily driven by ~79% growth by the private sector while LIC reported a slow 6% growth. Resultantly, the industry’s total APE grew 6.6% YoY, with the private sector witnessing ~11% YoY growth whereas LIC posted a marginal 0.2% decline. The number of individual policies sold during Aug-25 declined 10.3% YoY, largely driven by~14% decline in LIC whereas the private sector posted a 2% dip. YTDFY26, Retail APE for the industry grew 4.8% YoY, with the private sector clocking ~8% YoY growth and LIC posting a 2.4% drop. The industry’s total APE grew 8.8% YTDFY26, with the private sector growing 13.3% while LIC posted a meager 2.2% YoY growth.

Private listed players reported divergent growth trends; Max Life leads the show Among private listed players, Axis Max Life remained the top performer in Aug-25, with Retail APE growth at ~16% likely aided by the sale of monthly ULIP policies. HDFC Life reported a flat 0.7% Retail APE growth during the month, whereas SBI Life saw a ~4% decline in Retail APE. ICICI Pru Life witnessed ~15% decline in reported Retail APE during the month. YTDFY26, Axis Max Life remained the fastest growing player with ~19% Retail APE growth, followed by HDFC Life (up 11.6% YoY), SBI Life (up 5.1% YoY), and IPRU Life (reported Retail APE down 9.2% YoY). On total APE basis, Axis Max Life reported a strong ~20% YoY growth YTDFY26, while HDFC Life reported 12.4% YoY growth. SBI Life witnessed ~9% APE growth YTDFY26, whereas IPRU’s reported APE declined ~5%. Among other private players, BALIC reported a ~6% decline in Retail APE during Aug25, whereas Aditya Birla Sun Life Insurance and Tata AIA Life reported ~4% and ~13% retail APE growth, respectively, during the month.

We expect the life insurance industry to deliver ~11-12% retail APE growth

The industry is expected to see slow growth during H1FY26, owing to the high base of H1FY25 and impact of the new surrender regulations. With growth likely to recover in H2FY26, we expect the insurance industry’s retail APE to grow ~11-12%, with Private insurers likely to see slightly higher growth, at 13-14%, while LIC is expected to post retail APE growth of ~6-7%. Overall, the weak performance is likely to continue till Oct25 (given the Diwali festivities and impact of GST-related changes). However, such temporary weaknesses do not derail the secular story, and the private sector market leaders are well positioned for growth.

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