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Informist, Thursday, Feb. 5, 2026

 

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--LIC MD: Planning to foray into health segment, but no deadline yet 
--CONTEXT: Comments by LIC MD CEO Doraiswamy in post-earnings analysts call 
--LIC MD: Focussing on increasing bancassurance, operational efficiency 
--LIC MD: Reserves comfortable, hope to give more dividend FY26 vs FY25 
--LIC: Govt to cut stake to 90% by FY27, announcement likely in next few mos 
--LIC MD: Working with govt to lower its stake to 90% by FY27 
--LIC: Will not boost persistency ratio by compromising affordability 
 

 

By Priyasmita Dutta and Shruti Nair

 

NEW DELHI/MUMBAI – The Life Insurance Corp. of India Ltd. is working with the government to lower its stake in the insurance behemoth to 90% by 2026-27 (Apr-Mar), Managing Director and Chief Executive Officer R. Doraiswamy said Thursday. The government currently holds 96.5% stake in LIC and the regulatory mandate is to lower the stake by 10% to 90% within five years of public listing. "We should be able to come down to that, and the government and LIC together are working towards making it happen," he said in a conference call with analysts after the announcement of its December quarter earnings.

 

"Maybe you'll be hearing about the further transfer of shares being offered in the next few months to come," Doraiswamy said.

 

Earlier in the day, Informist reported, citing a senior finance ministry official, that discussions are underway with LIC and the Securities and Exchange Board of India on the number of tranches and the appropriate size for each tranche to further cut government's stake by 6.5%.

 

The government had sold a 3.5% stake in the insurer through an initial public offering in FY23, raising INR 205.16 billion. Based on the latest market price, the government could raise INR 51 billion by offloading just 1% of its stake in the insurance behemoth. Shares of LIC Thursday ended 0.5% higher at INR 839.75 on the National Stock Exchange.

 

As such, SEBI's Securities Contract (Regulation) Rules mandate that all listed companies comply with the minimum public shareholding norm within five years of listing. LIC, on the other hand, was required to have only 10% free float in the first five years and was given an additional five years to bring down the promoter stake to 75%. All listed companies, including public sector companies, must have a minimum public shareholding of 25%, as per the norms.

 

LIC's top management Thursday also said that the life insurer has been evaluating various options available in the market to acquire a health insurance company and foray into the health segment as well. "We have been looking at opportunities for investing in health insurance company. We are evaluating various options available in the market," Doraiswamy said. He, however, added that there is no timeline by when it would like to conclude the transaction. "We don't have any particular deadline or any such immediate date by which we are looking at doing that. We will be open to having stake in a very good opportunity that makes itself viable," he said. 

 

The state-owned insurance company had expected the Insurance Amendment Bill 2025 to include provisions for composite licencing which would enable the life insurer to foray into health insurance, but the bill did not include the provision. A composite licence allows an insurance company to provide multiple types of products, such as life, general, or health, under one roof.

 

LIC's net profit for the December quarter was INR 129.58 billion, up 17% on year and nearly 29% on quarter. The insurer's net premium income for the quarter was INR 1.26 trillion, up nearly 18% on year but marginally lower sequentially. LIC earned INR 60.11 billion from net commissions in the reporting quarter, only marginally higher than INR 59.66 billion in the corresponding period a year ago.

 

On the core business front, LIC's focus in FY27 will be to rationalise cost by going digital and by saving operational expenses at various levels; to improve operational efficiency at the ground level, while also focussing on increasing contribution from the various distribution channels. "We are also focussing on improving the contribution of banking channels and alternate channels, which in our case, also comes up with a bit more cost efficiency, as well as we are also looking at enhancing our digital footprint," Doraiswamy said.

 

In the first three quarters of FY26, LIC sold 191,997 policies through bancassurance and alternate channel, down 45% from the corresponding period a year ago.

 

Speaking about the insurer's persistency ratio, its management said that LIC can take a decision to improve the ticket size significantly, which will naturally, lead to higher persistency. But then affordability of insurance will be reduced, which LIC does not want since it is responsible for ensuring insurance for all, the management said. LIC has taken steps to address the issues, by shifting focus to higher-value non-par products and premium segments, and that impact will be seen going forward, the management assured.

 

The insurer's persistency ratio for the 13th month was 69.36% as of Dec. 31, up from 68.61% a year ago and 68.19% a quarter ago. However, the 61st month persistency ratio was 54.63% as of Dec. 31, down from 59.69% a year ago and 55.12% a quarter ago. 

 

Regarding dividend payout, Doraiswamy said that LIC has been improving its payout each year and is expecting it to be better than FY25 in the current year as well, maintaining the trend. The insurance behemoth had announced a final dividend of INR 12 per equity share for FY25, and will take a call for FY26 at the time of approving the annual financial performance by the end of the current quarter. "As of now, we have built up a quite a good amount of reserves, we are comfortable in that area. So, after the final results are declared, perhaps we will be able to take a call," he said.  End

 

Edited by Ashish Shirke

 

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