Higher share of Ulips likely to weigh on life insurers' profit margin

Non-life firms to post strong premium growth, benefit from low claims ratio

Increased sale of Unit Linked Insurance Plans (ULIPs) is set to weigh on the margins of listed life insurance companies in June quarter of FY25 (Q1FY25) despite higher premium accumulation on a favourable base.

A buoyant equity market has led to an increase in sales of ULIPs, driving the growth in Annualized Premium Equivalent (APE) of life insurers. APE is the sum of regular premiums plus 10 per cent of new single premiums in a particular period.

According to analysts at Emkay Global Financial Services, Value of New Business (VNB) margins for private sector life insurers will