LIC expects good business volume growth in Oct-Mar owing to GST rate cuts
This story was originally published at 20:20 IST on 6 November 2025
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--LIC: Entered into bond forward rate agreement worth INR 120 bln Mar-Sept
--LIC: Yet to take final call on foraying into health insurance sector
--LIC: Focusing on growth rather than market share
--LIC: Expect good business volume growth in Oct-Mar owing to GST rate cuts
--CONTEXT: Comments by LIC mgmt in post Jul-Sept earnings press conference
--LIC: Seeing good traction in Oct-Mar
NEW DELHI – Life Insurance Corp. of India is expecting a robust business growth in second half of 2025-26 (Apr-Mar). "We are seeing a good traction in the second half of the current year. One, on the Goods and Services Tax impact, we have taken a very clear call that we pass on the entire benefit of GST to the customers," Chief Executive Officer and Managing Director R. Doraiswamy said in a post-earnings press conference.
On Sept. 3, the GST Council had slashed rates on term life and health insurance premium paid by individuals to nil from 18%. The change came into effect from Sept. 22.
The life insurer had posted a 32% jump in net profit for the September quarter to INR 100.53 billion on back of sharp fall in net commissions as well as in employee remuneration and welfare expenses.
"We hope that the exemption of life insurance business from GST is going to result in a substantial increase in the business volumes and the top-line growth as well as our continuous effort to optimise our expenses," Doraiswamy said. The net value of new business margin for the September quarter increased 140 basis points to 17.6% from 16.2% a year ago, the state-owned insurer said.
Doraiswamy said LIC will be able to retain the current market share. "Our focus will be on our growth rather than worrying too much about the market share because we are focusing on profitable growth and sustained profitability over a period of time," he said. LIC's market share in terms of first year premium income for September was a tad lower at 57.1% from 58.2% a year ago. LIC's market share was 51.8% in August.
On the insurer's plan to foray into the health insurance business, Doraiswamy said the company is looking forward to what kind of changes are going to be introduced in the insurance bill. "We also have to make a calculated move as to what is the right time and what is the right company. So that is also we are yet to take the final call," he said. The bill proposes to allow insurers to offer both life and non-life insurance products under a single licence. This would mean life insurers would be able to offer general insurance products such as motor vehicle and health insurance.
LIC, which had started hedging its premium and payout exposures through bond forward rate agreements starting in March, after exploratory steps in January has written forward rate agreements to the tune of around INR 120 billion till September, the management said. "As the rates are still firm, we are not seeing any urgency on it. Slowly we will move forward to bond forward from bond trust," the insurer's management said.
The company's shares ended 1% lower at INR 896.10 on the National Stock Exchange. End
Reported by Sagar Sen and Shubham Rana
Edited by Akul Nishant Akhoury
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