HDFC Life reports growth in a declining insurance market

The life insurance industry is struggling, with LIC's significant decline in annual premium equivalent (APE) affecting overall performance. In February, APE dropped 6% industry-wide, largely due to LIC's 23% year-on-year decline and a 32% drop in individual policies sold. HDFC Life Insurance was the only major company to report growth in February 2025, with APE up 3.9% year-on-year. This contrasts with ICICI Prudential, which saw a 15% drop. HDFC Life's better performance is attributed to a more balanced product mix, with less reliance on unit-linked insurance plans (ULIPs). While HDFC Life's stock trades at a premium valuation, the overall market remains cautious. Analysts have lowered growth estimates for LIC, predicting a 6% decline in APE for FY26. The industry's future growth may depend on a recovery in stock markets to boost ULIP sales.