← Business Metric: Industry Specific (Consumer, Services & Financial) (all topics)
VNB (value of new business) & APE (annualised premium equivalent)
What it is
The two headline metrics of life insurance. Annualised Premium Equivalent normalises sales by counting regular premium in full and single premium at 10%, so growth is comparable across product types
Value of New Business is the present value of expected future profit from that year's sales; VNB margin is VNB divided by APE. Together they answer how much was sold and how profitable it was
Impact on industries
- VNB margin is the discipline that stops volume being chased for its own sake - a policy sold at a poor margin adds APE while destroying value
- Industry APE grew ~10% in FY26 to about Rs 1.33 lakh cr on new business premium of Rs 4.59 lakh cr, and leading insurers held VNB margins in the 26-28% range
- VNB rests on long-horizon assumptions - persistency, mortality, expenses and discount rates - so it is an estimate management influences, not a realised profit
- The metrics can diverge sharply: a shift toward ULIPs lifts APE while cutting margin, so the two must always be read together