LIC Q2 net profit rises 20% to ₹12,076 crore, net premium income up 16.2%

State-owned Life Insurance Corporation of India (LIC) on Thursday reported a 20.12 per cent year-on-year (Y-o-Y) rise in net profit at ₹12,076 crore for the second quarter of financial year 2026-27 (Q2FY27), supported by growth in premium income.

The insurer’s net premium income rose 16.2 per cent Y-o-Y to ₹1.47 trillion in the quarter, compared with ₹1.26 trillion a year ago. Net investment income increased nearly 2.5 per cent to ₹1.15 trillion. The annualised premium equivalent (APE) grew 3.8 per cent to ₹17,004 crore from ₹16,382 crore in Q2FY26.

In the first half (H1) of FY27, APE rose 5.72 per cent Y-o-Y to ₹30,696 crore. Individual APE increased 0.31 per cent to ₹17,224 crore. The share of non-participating (non-par) products declined to 34.03 per cent from 36.31 per cent a year ago, while the share of participating (par) products increased to 65.98 per cent.

The management said sales of unit-linked insurance plans (Ulips) tend to come under pressure during periods of weak market sentiment, prompting the insurer to sharpen its focus on protection products.

“We launched a new pure-term insurance product in September, which has received a strong response. In the last few days of September alone, we sold over 58,000 policies under the newly introduced plan. Going forward, our key focus areas will be pure-term protection products, non-par savings products, and the annuity business. Ulips could recover if market sentiment improves, but our immediate priority remains savings and protection,” said R Doraiswamy, managing director and chief executive officer (MD & CEO) of LIC.

On the impact of IDBI Bank’s proposed sale to Fairfax Financial Holdings on the bancassurance channel, LIC expects the lender to continue as a distribution partner.

“The open architecture framework allows banks to work with multiple insurance companies. Therefore, even if IDBI Bank has another insurance company under its ownership, it can continue to distribute LIC products. We are also engaging with several other banking partners. Some banks have joined our distribution network over the last two quarters, and their full potential is yet to be realised. We are confident that our bancassurance business will continue to grow despite the proposed IDBI Bank transaction,” he said.

LIC’s value of new business (VNB) rose 17.14 per cent Y-o-Y to ₹3,710 crore in Q2FY27. Its VNB margin, a measure of the profitability of life insurers’ new business, improved to 21.82 per cent from 19.33 per cent in the year-ago period.

The insurer’s expenses declined 1.13 per cent Y-o-Y to ₹15,061.5 crore in the quarter from ₹15,234.4 crore. Net commission outgo rose 4.9 per cent to ₹6,055.76 crore.

LIC’s assets under management (AUM) stood at ₹59.60 trillion as of September 30, 2026, up 4.16 per cent from ₹57.23 trillion a year ago.

The yield on investments of policyholders’ funds, excluding unrealised gains, stood at 9.04 per cent in Q2FY27, compared with 9.33 per cent in the year-ago period and 8.28 per cent in Q1FY27.

LIC’s 13th-month and 61st-month persistency ratios stood at 67.67 per cent and 55.50 per cent, respectively, in Q2FY27. In the preceding quarter, the ratios on a premium basis were 68.19 per cent and 55.12 per cent, respectively.

The insurer’s expenses of management (EOM) ratio improved to 10.26 per cent from 12.05 per cent in Q2FY26. Its solvency ratio stood at 235 per cent, compared with 213 per cent a year ago.

LIC continued to be the market leader in the life insurance industry, with a 58.77 per cent share of first-year premium income (FYPI) for the first half (H1) of FY27, compared with 59.41 per cent in H1FY26, according to data from the Insurance Regulatory and Development Authority of India (Irdai).

“We at LIC are very optimistic about the positive impact of the proposed regulatory changes announced by Irdai for the insurance industry in September 2026. We believe that most of these changes are in the best interest of customers and will lead to further accelerated growth of the life insurance industry in India,” Doraiswamy said.