LIC targets sales growth in double digits for FY26: MD & CEO R Doraiswamy

The 64 per cent market share is on a composite basis, in which group insurance plays a major role, says Dowaiswamy

R Doraiswamy, who took charge as MD & CEO of  Life Insurance Corporation (LIC) of India last month, says the corporation wants enhanced due diligence to pick up a strategic stake in a standalone health insurance firm. He also emphasises that market share can go up or down, but LIC will continue to be a major player in India and internationally, in an interview with Aathira Varier, Subrata Panda and Manojit Saha. Edited excerpts: 

How do you see LIC faring in terms of market share, growth over the next three years? 

We are looking at growing, and showing profitable growth in all the parameters. Market share of LIC may go up or down in some quarters, but we are looking at consistent growth, and delivering profits for the stakeholders. Three years down the line, I would still like to be a major player, not only in the country, but also in the international arena, having substantial lead over the rest of the market. 

Your market share is in the mid-60s presently. Do you think that needle can move up? 

The 64 per cent market share is on a composite basis, in which group insurance plays a major role. The group market has got its own cyclical nature, so it can move either way. But I would like to be a major player contributing to the goals of the nation, which is insurance for all by 2047. 

What are your growth plans for FY26? 

We have started showing single digit growth in new business premium, but we are currently de-growing on policy sales. We would like our policy sales growth to pick up in FY26. At the end of the year, we would like to have decent growth, which is not less than the industry growth. 

How is LIC looking to address negative growth in policy sales? 

De-growth in policy sales is a result of the amendments to the product portfolio that we had to do in response to the (Irdai) master circular, effective October 1, 2024. When the master circular [on surrender value] got implemented, we had to completely modify all our existing product portfolio. Some products had to be modified because of the need to introduce surrender value at the end of one-year and some because there were some underlying assumptions and regulations. So, in effect, we had to modify almost all products, and that has resulted in a strain in the number of policies being sold because we had to increase the minimum sum assured of the most popular plans from ₹100,000 to ₹200,000. And we also had to tweak the commission distribution ratio from the first year to subsequent years. 

Having said that, de-growth is coming down. In August, September, we hope to see the de-growth being wiped out, and in H2FY26, because of the low base, we hope to show good growth. We are looking at an early double digit over last year in the number of policies. 

Do you aspire to report high margins like private players? 

For an organisation like us, we need to balance between customer benefits and margin. We have to see that customer benefits are given prime importance and in that process, LIC should grow and also show some margin. LIC has been a very heavy participating (par) products [player]. From 2022, we took a directional change. We started increasing our focus on non-par products and slowly improved their share, in terms of APE [annual premium equivalent], from 7 per cent to 30 per cent. Margin will show a good increase towards the end of the year. In FY26, our focus will be to show an incremental growth in margin quarter over quarter and see that at the end of the year, we have a margin which is better than last year’s overall margin. We are not comparing ourselves with any other company in terms of margin. 

How do you want your par- non-par product mix to be? 

There will be some more growth in the non-par share over a period of time. We have been consciously focusing on non-par products. Almost all the products we introduced over the last two years have been on the non-par side. That has resulted in the non-par APE going up. We have reached a stage where we can now start focusing a bit more on par products as well. There is no ideal par-:non-par ratio. However, we can look at something around 40:60. 

You have not launched participatory products in the last two years. Will you introduce some this year? 

Yes, we will be looking at one or two par products being introduced in FY26. There will be a few more non-par products added. 

LIC wanted to acquire a stake in a standalone health insurance company and a deal was expected by March 31, 2025. Has your stance changed?

  There is no shift in stance. We were looking at taking a strategic stake in a standalone health insurance company without being a promoter, or without directly entering into health insurance distribution, before the changes in the insurance laws were expected. We have been evaluating a few options and we found that we need to do a bit more due diligence before taking a plunge into that. Initially, we said we will close it by March 31, 2025, but we could not meet this deadline because at the board level, we felt that we need to do more analysis, due diligence before drilling down to a single company in which we can take a stake. We are now examining the options once again in a deeper way. And we will be taking a call as time progresses. It will be a strategic stake, not a majority stake. 

Will you look at manufacturing non-life products once a composite licence comes into the picture? 

Right now, we are not looking at manufacturing anything. We are awaiting the insurance law amendment. Once it happens, then we will have the option. We are not saying that we will immediately convert ourselves into a composite company and enter health. We will evaluate the market in a thorough way. We are a core life insurance player. We would like to remain a strong life insurance player, with good leadership in the market. 

However, if the opportunity presents itself, that we can also do something on health or on some lines of general insurance business, provided the amendments to the Act allows that, we may examine them very closely, and take a call. 

Is a merger with any state-owned PSU general insurer an option? 

It is not an option as of now. 

Compared to private players, your bancassuance share is low… 

We have already started tapping private sector banks. IDBI bank is our number one partner. But, it is followed by Axis Bank, IDFC First Bank. Additionally, we have a good number of regional banks, which are not national level big players. In FY26 so far, bancassurance is already touching more than 7 per cent of our total new business premium. We are expecting it to go up to double digits this year. 

What is your plan to hedge the non-par portfolio? 

Apart from bond FRA, we also have bond forwards which have been introduced. We will look at all available options. 

How much do you plan to retain in IDBI Bank after its stake sale? 

We currently have 49.24 per cent stake in IDBI Bank. Government has called for expression of interest and some parties have already expressed their interest in that. We hope that the government proceeds on those lines and we will be participating along with them in the current disinvestment process. After that, we are not immediately looking at offloading any further stake but we have to come within the regulatory permitted limits. That we will be doing slowly and at the optimum price. We will look at value creation for this. We will not be hastily doing anything. 

What is the status of further stake sale (in LIC) by the govt.? 

There is a regulatory requirement wherein the government’s stake has to go down to 90 per cent and then to 75 per cent. Already, an exemption was given for LIC's stake sale. Government has announced that they will be reducing their stake to 90 per cent by 2027. So DIPAM and DFS are working together, and we are closely coordinating with them. Roadshows have not started yet.