LIC's Q1 net profit rises 23% to ₹13,492 crore on higher premium income

State-owned LIC reported a 23 per cent rise in Q1FY27 net profit as premium and investment income grew, while value of new business surged 61.3 per cent

State-owned Life Insurance Corporation of India (LIC) on Thursday posted a 23 per cent year-on-year (Y-o-Y) growth in net profit to ₹13,492 crore in the first quarter of financial year 2026-27 (Q1FY27), supported by growth in premium income and investment income.

 

Total premium income of the insurer was up by 6.7 per cent Y-o-Y to ₹1.27 trillion in Q1FY27, driven by a 9 per cent Y-o-Y jump in group business premium to ₹51,834 crore, while its individual premium income was up 5.5 per cent Y-o-Y to ₹75,416 crore. LIC’s investment income grew by 6.24 per cent Y-o-Y to ₹1.09 trillion in the first quarter.

 

 

Value of new business (VNB) grew 61.3 per cent Y-o-Y to ₹3,136 crore in Q1FY27, and the VNB margin improved by 750 basis points (bps) to 22.9 per cent in the same period. But sequentially, the VNB margin was down.

 

“…Our VNB has grown by 61 per cent plus and our VNB margin has expanded by 7.5 per cent to 22.90 per cent this year. This is a direct outcome of our product diversification and distribution strategy. Growth has been driven by product buckets with higher VNB margins, while remaining muted in areas that are less value-accretive,” said R Doraiswamy, managing director and chief executive officer (MD & CEO) of LIC.

 

The annualised premium equivalent (APE) of LIC was up by 8.22 per cent Y-o-Y to ₹13,692 crore. APE is the sum of annualised first-year regular premiums plus 10 per cent weighted single premiums. The individual APE grew by 6.67 per cent Y-o-Y to ₹7,532 crore, and group APE was up by 10.2 per cent Y-o-Y to ₹6,160 crore.

 

“The numbers are good this quarter, but if you look at the growth in premium or APE, it is not as high as what you would have expected. So, certainly we say there is some impact, particularly in the lines of business which are directly related to interest rates or markets like ULIPs or annuity. They do get impacted when the market scenario is like this. We hope and pray that the market completely improves, comes out of the entire situation that has arisen out of the West Asia crisis, but we will have to wait and see how it turns out. It is too early and very difficult to predict,” said Doraiswamy.

 

The share of non-participating (non-par) products in LIC's APE mix has risen to 32.5 per cent, while participating (par) products account for the remaining 67.5 per cent. The state-owned insurer said it was comfortable maintaining a product mix of 65-70 per cent par products and 30-35 per cent non-par products.

 

Par products share insurer profits via bonuses, whereas non-par policies provide fixed benefits without surplus sharing.

 

“We have been maintaining that we are increasing the focus on protection, and the contribution from protection will keep increasing. We will continue to improve on non-par savings as well as in other areas. While market conditions influence demand for products like ULIPs, our focus will be on increasing protection in the next few quarters,” Doraiswamy said.

 

LIC sold 31.02 million policies during the quarter, up 2.06 per cent Y-o-Y. The insurer's solvency ratio improved by 25 bps to 242 per cent as on June 30, 2026, from 217 per cent a year earlier.

 

The 13th-month persistency ratio (on a number of policies basis) improved to 66.45 per cent from 64.35 per cent, while the 61st-month persistency ratio declined to 48.74 per cent from 51.12 per cent.

 

Meanwhile, assets under management (AUM) rose to ₹59.39 trillion as on June 30, 2026, from ₹57.05 trillion a year ago.

 

LIC, which is agent-heavy in its distribution, saw its bancassurance and digital channels account for nearly 8-10 per cent of its channel mix, with a target of increasing this to around 15 per cent over the next one to two years, the management said.

 

As one of the MDs of the insurer is set to move to Irdai as member (actuary), LIC said it has taken up with the government the issue of vacancies, and that it is working on the matter and expects the vacancies to get filled soon. The company currently has only three MDs, instead of four, apart from one MD & CEO.

 

LIC continued to be the market leader in Indian life insurance business with an overall market share of 60.1 per cent as of Q1FY27. The insurer held a market share of 38.89 per cent in Individual business and 70.9 per cent in the group business.

 

This week, the central government sold 6.5 per cent stake in LIC via an offer for sale (OFS) and raised ₹31,552 crore. Following the OFS, the government’s stake in LIC now stands at 90 per cent.

 

“I want to welcome the new shareholders into the LIC shareholder family, and also thank the existing shareholders who have participated in the OFS for their continued faith in LIC,” said Doraiswamy. He added that it is unlikely that the government will sell any further stake in the next few years since the minimum public shareholding has been reached.