LIC's Value of New Business jumps 61% in Q1 as margins expand to 22.9%; Profit rises 23%
Mumbai, August 6
Life Insurance Corporation of India reported a sharp improvement in the profitability of its new business during the first quarter of FY27, with its Value of New Business rising 61.32 per cent year-on-year to Rs 3,136 crore, while the net VNB margin expanded by 750 basis points to 22.9 per cent. The state-owned insurer also posted a 22.81 per cent increase in profit after tax to Rs 13,492 crore for the April-June quarter.
LIC's total premium income grew 6.75 per cent year-on-year to Rs 1,27,250 crore during the quarter, supported by growth in both individual and group businesses. Individual new business premium rose 14.48 per cent to Rs 14,351 crore, while group business premium increased 8.61 per cent to Rs 51,834 crore.
The insurer's overall Annualised Premium Equivalent (APE) increased 8.22 per cent to Rs 13,692 crore. Individual business APE grew 6.67 per cent, while group business APE rose 10.20 per cent during the quarter.
LIC continued to improve its product mix, with the share of higher-margin non-participating (Non-Par) products within the individual business increasing to 32.49 per cent from 30.34 per cent a year earlier. Non-Par APE rose 14.24 per cent to Rs 2,447 crore.
Commenting on the performance, LIC Chief Executive Officer and Managing Director R Doraiswamy said, "We are happy to maintain our leadership in both Individual and Group Business during the first quarter of this financial year, despite increasing competitive intensity in the life insurance industry. Our overall market share by First Year Premium Income was 60.10% for the first quarter of FY 2026-27 and this fits in well with our market share strategy."
He added, "This is a direct outcome of our product diversification and distribution strategy." Doraiswamy also welcomed new shareholders following the government's recent offer for sale (OFS), saying the insurer hopes to mark its 70th year with innovative product launches and other customer-focused initiatives.
The insurer's overall expense ratio increased marginally by 16 basis points to 10.63 per cent during the quarter. Meanwhile, gross NPAs under the policyholders' fund declined to Rs 7,168 crore from Rs 8,436 crore a year earlier, with the gross NPA ratio improving to 1.21 per cent from 1.42 per cent.
— ANI
Reader Comments
As a LIC policyholder for past 15 years, I'm happy to see these numbers 📈 But still waiting for customer service improvements. The new product launches better be innovative like they promised. Policyholders' fund NPAs coming down is a good sign though.
The rise in Non-Par products share to 32.49% shows LIC is finally modernizing its product mix. But 22.9% margin is still lower than some private insurers. Need to see more aggressive cost management going forward. Good start though for LIC shareholders.
LIC's growth is impressive but I wish they'd focus more on rural penetration and smaller cities. The expense ratio is still high at 10.63%. Also, why is the group business growing slower than individual? Need better distribution in Tier 2 and 3 cities.
Dear fellow Indians, please don't get swayed by these numbers. Check the claim settlement ratio and customer service record before buying policies. LIC is improving but the market share is declining because people want better returns on their investments. Just saying. 🤔
Great to see LIC's profitability improving! The 750 bps margin expansion is significant. But with the OFS, the government should ensure LIC remains stable and focused on policyholder interests, not just market performance. 70 years of trust shouldn't be compromised.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.