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Informist, Thursday, Nov. 5, 2026

 

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--LIC: Optimistic about positive impact proposed IRDAI norms 
--CONTEXT: Comments by LIC management at post-earnings press conference 
--LIC: Don't see impact on volume due to IDBI Bk-Fairfax Fincl Holdings deal 
--LIC: Expect value of new business margins seen up going forward 
--LIC: Newly launched plans to boost growth for rest of FY27 
--LIC: Expect IDBI Bank to continue to be channel partner 
--LIC: See unit-linked insurance plans to perform well going forward 
--LIC: Had most investments of Q2 in gilts, state govt bonds 
--LIC: See investments in govt securities to go up in Q3

 

MUMBAI – Life Insurance Corp. of India's management expects the value of new business margin to continue to rise going forward as the insurer currently focusses on the challenge mix and is also increasing the minimum ticket size in some lines of business. "As we continue to focus on the non-par savings and the term assurance business, we can expect a very good attraction on VNB (value of new business) margin as well," Managing Director and Chief Executive Officer R. Doraiswamy said at the post-earnings press conference Thursday.

 

The state-owned life insurer's value of new business rose 34% on year to INR 68.46 billion as on Sept. 30 while the margin rose 470 basis points to 22.3%. The value of new business margin was 17.6% in the same period the previous year. The insurer's total annualised premium equivalent rose 6% to INR 306.96 billion for the first half of 2026-27 (Apr-Mar). 

 

Of the total annualised premium equivalent, 56.11% or INR 172.24 billion was accounted for the individual business and 43.89% or INR 134.72 billion was accounted for the group business. The group business' annualised premium equivalent rose nearly 14% on year while the growth in individual annualised premium equivalent plateaued. The management said this was due to negative pressure on unit-linked insurance plans. The annualised premium equivalent from unit-linked insurance plans fell 40% on year during Apr-Sept to INR 18.8 billion. 

 

"For the quarter there is some stress on ULIP (unit-linked insurance plans) APE. But also there is going to be some more discipline, persistency, enhancing approaches so that whatever policies in ULIP we are selling that should see the persistency, benchmarks, and that attempt is already being taken up," a senior official said. "And for Q3 and Q4 (the December and March quarters) with the introduction of new plans, there is a few term-insurance plans we have launched, and that has gained good traction from even remote rural pockets of the country. So that way...we are hoping for good growth in Q3 as well as for the ultimate Q4," the official said.

 

To the official's reply, the CEO added that the company is not trying to push sales of the unit-linked insurance plans amid volatile markets. "We have taken some initiatives to increase the focus on ticket sizes, which are conducive for us to show a consistent improvement in VNB margin as well," he said.  

 

Doraiswamy said the state-owned insurer is shifting its focus heavily on protection business as it has been lagging in this segment so far. These steps taken by the management are likely to help the company report better growth in its business during the rest of the year, the CEO said. 

 

The life insurer's net profit rose over 20% on year to INR 120.76 billion for the September quarter. Net premium income for the quarter rose nearly 17% on year to INR 1.47 trillion.

 

The management said the government's decision to sell 60.72% stake in IDBI Bank Ltd. to Canada's Fairfax Financial Holdings Inc. will not have a major impact on the bancassurance business. The management expects the bank to remain as their channel partner and the insurer's engagement with other banks will support the business. "There are multiple banks with whom we are signing partnerships. There are banks which have joined our partnership in the last two quarters whose potential we are yet to unleash," the CEO said. 

 

"IDBI Bank, even after the deal going through, as and when it goes through, will have the option and the opportunity to continue to work with LIC in terms of distribution of LIC's products," Doraiswamy said. "We don't expect too much of an impact in terms of the volume that they are currently doing....(The bank) will have the option and the opportunity to continue to work with LIC in terms of distribution of LIC's products," he said. 

 

Further, talking about the impact of the proposed commission regulations changes announced by the Insurance Regulatory and Development Authority of India on agents, Doraiswamy said the management is optimistic about the positive impact of these norms. "We believe that most of these changes are in the best interest of customers and will lead to further accelerated growth of the life insurance industry in India," he said. He added that the company would protect the interests of its agents in all possible ways within the regulatory framework and has given its feedback to the regulator on the proposed norms. On Sept. 23, IRDAI proposed sweeping changes to life insurance expenses, commissions, and market conduct. It proposed commission limits for insurance distributors based on the complexity of sales and service, rather than a uniform fee. 

 

The hardening of bond yields in the September quarter had a positive impact on the company's investments as the insurer had most of its investments during the quarter in central government and state government bonds. The management said it expects investments in government securities to go up further in the December quarter.  

 

Thursday, shares of LIC closed flat at INR 408 apiece on the National Stock Exchange.  End

 

Reported by J. Navya Sruthi and Prasobh Namboothiri

Edited by Shubhayan Bhattacharya

 

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