LIC's Q3 net profit up 17% in Q3 due to higher premiums, investment income

LIC's Q3 profit rose 17% on strong premium and investment income, while higher VNB margins and lower cost ratios supported overall performance

State-owned Life Insurance Corporation of India’s (LIC’s) net profit for the third quarter (October–December/Q3) of 2025–26 (FY26) rose 17.2 per cent year-on-year (Y-o-Y) to ₹12,958.2 crore, aided by growth in premium income and investment income.

 

Net premium income during the quarter increased 17.51 per cent Y-o-Y to ₹1.25 trillion, compared with ₹1.06 trillion in Q3 of 2024–25 (FY25). Net income from investments rose 14.07 per cent Y-o-Y to ₹1.07 trillion.

 

The insurer’s annualised premium equivalent (APE) jumped 50.5 per cent Y-o-Y to ₹14,973 crore from ₹9,950 crore a year ago, driven by the revision in goods and services tax (GST) on individual life insurance policies. The Centre announced the rationalisation of GST rates on September 22, 2025.

 

The value of new business (VNB) climbed 64.95 per cent Y-o-Y to ₹3,177 crore. The VNB margin — a measure of life insurers’ profitability — rose to 21.21 per cent in the quarter from 19.36 per cent a year earlier. Management said it aims to improve margins steadily.

 

Individual APE rose 12 per cent Y-o-Y to ₹27,552 crore. Of this, the share of non-participating (par) products stood at 36.46 per cent, compared with 27.68 per cent in the same period last year. The share of par products fell to 63.54 per cent from 73.69 per cent in the April–December period of FY25.

 

“In the past two quarters, we are almost at around 36 per cent (non-par share). There can be some improvement, but par is also a large portfolio and will continue to contribute. So this may stabilise around this range. It could increase by another 1–2 percentage point,” said R Doraiswamy, chief executive officer and managing director of LIC.

 

Company expenses during the quarter rose 8.04 per cent Y-o-Y to ₹15,575.87 crore from ₹14,415.8 crore. Net commission increased marginally by 0.57 per cent Y-o-Y to ₹6,010.57 crore. LIC said it remains compliant on commissions and had realigned its structure last year following the new master circular.

 

“We are more or less at the optimum level of the commission structure. If regulations provide further directions, we will comply. As of now, we are waiting to see what the regulator says,” Doraiswamy said.

 

The expense of management ratio improved to 12.38 per cent from 13.47 per cent in Q3FY25. The solvency ratio stood at 210 per cent, compared with 202 per cent a year earlier.

 

Assets under management stood at ₹59.16 trillion as of December 31, 2025, up 8.01 per cent from ₹54.77 trillion a year ago.

 

In Q3, LIC’s persistency ratios stood at 69.36 per cent for the 13th month and 54.63 per cent for the 61st month. In the preceding quarter, the corresponding ratios were 68.61 per cent and 59.69 per cent.

 

By first-year premium income, LIC remained the market leader in the Indian life insurance sector, with an overall market share of 57.07 per cent for the half-year ended December 31, 2025, compared with 57.42 per cent for the same period last year, according to the Insurance Regulatory and Development Authority of India.

 

On a potential stake acquisition in a health insurance company, Doraiswamy said, “There was a plan to enter as a strategic investor in a standalone health insurer to understand the market. But after evaluating options, we do not see this as immediately necessary. We are not moving fast, but if the opportunity and market conditions line up, we may consider an investment.”