Detailed narrative
Life Insurance Corporation of India (LICI) reported a robust first half of fiscal year 2026 (April-September 2025), demonstrating strong growth in key financial metrics despite a dynamic operating environment. The company's total premium income increased by 5.14% year-on-year to ₹2,45,680 crores. Profit After Tax (PAT) saw a significant jump of 16.36% to ₹21,040 crores, while Net Value of New Business (VNB) grew 12.3% to ₹5,111 crores. This positive performance was underscored by a 140 basis points improvement in the Net VNB margin, reaching 17.6% for H1 FY26. Assets Under Management (AUM) also expanded by 3.31% year-on-year to ₹57,22,896 crores as of September 30, 2025.
Segment-wise, LICI maintained its leadership, holding a 59.41% market share by first-year premium income. The individual business contributed 37.21% of the market share, while the group business accounted for 72.74%. A notable strategic shift was the increase in the Non-Par share of individual Annualized Premium Equivalent (APE) to 36.31% in H1 FY26, up from 26.31% in the prior year, reflecting a successful product mix realignment. The Bancassurance and Alternate Channels showed exceptional growth, with new business premium income soaring by 67.62% year-on-year to ₹2,024.10 crores, now contributing 7.12% to individual new business premium.
Management highlighted several strategic initiatives, including the launch of four new non-par products and two new riders during the period, expanding their comprehensive product suite to 57. Digital initiatives like the agent-assisted Ananda app also saw significant traction, with policies completed through the app growing by 21.46% and active agents increasing by 40.07%. The Bima Sakhi program, aimed at rural penetration, has designated 2.57 lakh women, covering 44% of gram panchayats and generating ₹1,096 crores in new business premium. The company also managed to reduce its overall expense ratio by 146 basis points to 11.28%, demonstrating a focus on cost efficiency alongside growth.
The outlook remains bullish, with management expressing confidence in sustaining the upward trajectory of VNB margins and achieving substantial top-line growth in the second half of FY26. They intend to focus on improving agent productivity, increasing ticket sizes, and leveraging the recent GST exemption on life insurance products as an opportunity for further market penetration and business growth. While acknowledging a drop in the number of policies sold and some persistency dips due to regulatory changes and the GST announcement, management is confident in a strong recovery by the end of the financial year.
During the Q&A, management was generally transparent about historical performance and strategic direction but showed some evasion when pressed for specific quantitative impacts, such as the exact mark-to-market component of embedded value or the precise impact of GST on VNB margins. They clarified that the GST impact has already been factored into the reported H1 FY26 numbers and that their strategy to offset it involves volume growth and operational efficiency rather than changes to commission structures. The company reiterated its commitment to balancing product mix for optimal VNB and growth, rather than targeting specific mix proportions or market share percentages directly.