Analyst Concall
LIC to focus on value of new business; margin rise seen slow
This story was originally published at 22:34 IST on 21 May 2026
Register to read our real-time news.Informist, Thursday, May 21, 2026
Please click here to read all liners published on this story
--LIC: Confident on entering phase of superior growth on every metric
--CONTEXT: Comments by LIC mgmt in post-earnings analyst call
--LIC: Rise in non-par pdts in business mix aiding VNB margin
--LIC: Maintained high capital buffer to push business growth in FY27
--LIC: Value of new business more important for us than margins
--LIC: Expect margins to further improve
--LIC: Expenses rose Q4 due to bunched up maturity on individual policies
--LIC: Benefit payout to remain high in Q1, have prepared for it
--LIC: Took conscious call to cut agency business to increase ticket size
--LIC: Took conscious call to cut agency business to improve persistency
--LIC: Focus is to increase ticket size
--LIC: Increase in margins may be gradual, slow from here
--LIC: Apr growth strong in both participatory, non-participatory pdts
By Aaryan Khanna and Vaishali Tyagi
NEW DELHI – Life Insurance Corp. of India will focus on increasing its value of new business and sees business growth as more important than margins in the financial year 2026-27 (Apr-Mar), its management told analysts in a conference call. After achieving a value-of-new-business margin of 21.2% in FY26, up 360 basis points on year, the management said any further increase will be slow and gradual.
"Margin is very important, but for LIC, ultimately, it is the VNB (value of new business) growth which is the most important because that's the most balanced version of the business growth," the management said on the call after the corporation had announced its March quarter earnings. "We do not want to be going overboard on VNB margins because the customers are also very critical and the profitability is very important, but the customer base has to grow."
The management had guided for a value-of-new-business margin of 20% for FY26 but had gone on to exceed that mark. Executives still see room to improve margins, but said that with margins rising to similar levels as private-sector competitors, the potential for growth is lower. Its business growth in both the participatory and non-participatory segments have been strong so far in the June quarter, particularly in April, the management said.
The margin growth had come because of an increasing mix of higher-margin non-participatory products sold in the financial year ended March, the management said. Individual annual premium equivalent from non-participatory products rose to 35% in FY26 for LIC from under 28% in FY25. This change in business mix had contibuted to a 300-basis-point expansion in the margin, officials said.
The state-owned life insurance behemoth has kept aside additional capital to help fund growth in the higher margin business, which had also come about due to a change in customer preference from participatory and market-linked products. These products are more capital intensive initially but have contributed to increasing ticket sizes, which is another focus for the insurer, the management said.
In this regard, the company has taken a conscious decision to cut distribution through agents as that was reducing its ticket size and also bringing down its persistency ratio. The numbers of agents fell to 1.46 million as of March-end from 1.49 million a year ago, after having risen consistently from 1.21 million in March 2020. Instead, LIC is using other methods of agency distribution and a digital push to replace sales from agents, while pursuing a higher ticket size, the management said.
Earlier Thursday, the insurer reported that its net profit rose over 23% on year to INR 234.20 billion for the March quarter. The net profit was up nearly 81% sequentially. LIC's net premium income for the reporting quarter rose nearly 12% on year and over 31% sequentially to INR 1.65 trillion.
During the quarter, payouts rose due to the bunched-up maturity of individual policies written 25 years ago rather than a group insurance payout. This is expected to remain high in the coming quarters as well because a large number of policies are coming up for maturity. "So there is a good amount of maturity claims that are going to happen, that happened in the last quarter as well, as it will continue to happen till the January of 2027," the management said. "So we are well planned and working towards that." End
Edited by Rajeev Pai
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2026. All rights reserved.
To read more please subscribe
Share this Story:
