Life insurers are rebalancing their product portfolios, steering toward non-participating (non-par) savings products in the first half of FY26, that offer guaranteed long-term returns at a time of elevated interest rates and volatile equity markets.
Non-participating savings products are financial plans that offer pre-determined benefits without sharing any of the insurer's profits with the policyholder.
The trend is evident across industry, with leading private players such as SBI Life and ICICI Prudential Life reporting a rise in their non-par business. At SBI Life, non-par savings products accounted for 41 percent of total business in H1FY26, up from 32 percent a year ago.
During the Q2FY26 analyst call, SBI Life said the demand for guaranteed-return plans remains robust across both bancassurance and agency channels due to the current rate environment that allows insurers to offer competitive returns without eroding profitability.
“We have repriced some of our non-par offerings in response to changes in the yield curve, passing on the benefits to customers while maintaining margin discipline,” SBI Life CEO Amit Jhingran said.
Meanwhile, SBI Life's ULIP (unit-linked insurance plan) share has declined to 55 percent from 61 percent a year earlier. Participating (par) and protection products, meanwhile, has remained stable at around 4 percent each.
ICICI Prudential Life too has reported a steady traction in its non-linked savings segment, including both participating and non-par products, with the portfolio rising to 21.8 percent of total business in H1FY26 from 19.6 percent a year ago.
HDFC Life’s Contrasting Trajectory
HDFC Life, however, bucked this broader industry trend, with its non-par share down sharply to 18 percent in H1FY26 from 32 percent a year ago, a deviation in an otherwise uniform industry tilt toward guaranteed-return products.
According to the management, this decline partly reflects a normalisation from an unusually high base in FY25, when guaranteed-return products gained significant traction following tax changes that reduced the appeal of high-ticket ULIPs. Managing Director and CEO Vibha Padalkar said the company’s approach has been to balance growth with pricing discipline.
“Yes, we do expect some pickup in non-par to happen in the second half. We do see some aggression in pricing, which we try and stay away from,” said Padalkar. “We will continue to innovate on the product front to bring more relevant and interesting propositions to customers.”
Padalkar added that HDFC Life’s product mix last year was already at a high 30-percent level in non-par, unlike some peers who are expanding from lower bases. “For some of the peers that you are referring to, probably they started on a much lower base compared to where we did. So that is also something to consider,” she added.
Padalkar highlighted rational behaviour is returning post the GST changes, and the company’s focus on protection growth remains intact. “I think given GST, some of the rational behaviour hopefully should percolate down. We have certainly seen that in term business. We have really grown well on retail term, almost 27 percent in sum assured, and we will replicate the same on non-par. Our overall growth in non-par in H2 should be higher than in H1,” she said.
HDFC Life's ULIP margins have improved to 42 percent in Q2FY26 from 39 percent a year earlier, helped by a higher share of policies with increased sum assured. “About one-fourth of the ULIP business we now do is on higher sum assured, which meaningfully alters the margin profile of this product category,” Padalkar had said.
HDFC Life’s protection business continues to remain strong, rising 27 percent on-year, while annuity products grew 16 percent. CFO Niraj Shah had earlier told Moneycontrol that the company expects protection to grow faster than the overall business in FY26, reinforcing its position as a high-margin segment alongside non-par savings.
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