Highlights
- CEO discussed the insurer’s Q1 results, strategy around non-participating products, margin outlook.
- He said performance in Q1 has been good and a good improvement in VNB and VNB margin.
- We are planning something around one-third, two-thirds, he added.
Life Insurance Corporation of India (LIC) has delivered a strong first quarter of FY27, with Value of New Business (VNB) surging 61 per cent. In an exclusive conversation with ET Now, CEO and Managing Director R Doraiswamy has discussed the insurer’s Q1 performance, strategy around non-participating products, margin outlook and the government’s recent offer for sale (OFS).
Q1 results driven by product mix
LIC has reported a 22.8 per cent YoY rise in profit after tax to Rs 13,492 crore for the quarter ended June 2026. VNB jumped 61 per cent to Rs 3,136 crore, while the net VNB margin expanded 750 basis points to 22.9 per cent from 15.4 per cent a year earlier.
“Our performance in Q1 has been good and a good improvement in VNB and VNB margin thanks to the product mix change that we have been taking for quite some time,” he said.
He noted that growth in non-par savings and protection segments made a substantial contribution, while margins also improved in the participating (par) business and the group segment.
Non-par share at 32.5%; Targeting around one-third
The share of non-participating products in individual Annualised Premium Equivalent (APE) stood at around 32.5 per cent in the quarter, up from about 30 per cent a year earlier.
Doraiswamy said the company is comfortable consolidating around the one-third mark.
“We expect the share of non-par to be around this area… we are planning something around one-third two-thirds… it can be a 35-65 or a 30-70 in that range is fine with us,” he said.
He added that margins have been improving across both non-par and par products, with non-par savings and protection playing a key role in the overall VNB margin expansion.
LIC continues to focus on product mix, persistency and pricing to support further margin improvement.
Management has indicated room for additional expansion, with some commentary pointing toward mid-20 per cent VNB margins over time, supported by the ongoing shift toward higher-margin non-par products.
The insurer maintained its market leadership with an overall first-year premium income market share of 60.10 per cent during the quarter.
On the shareholding front, Doraiswamy said the recent government OFS of 6.5 per cent stake had been well received by the markets.
“Just very recently, the Government of India sold an additional 6.5 per cent of shares through an offer for sale (OFS), which has been well received by the markets,” he said, welcoming the new shareholders into the LIC family.
He also indicated that further government stake sales are unlikely in the near term.
The recent OFS has already helped LIC achieve the 10 per cent public shareholding milestone well ahead of the earlier May 2027 deadline.
(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
