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    Life Insurance

    LICIGood
    Financial Services·12 Feb 2026
    Management Summary

    Life Insurance Corporation reported a strong performance for the nine months ended December 31, 2025, with significant growth across key financial metrics. Total Premium Income, PAT, and Net VNB all saw double-digit year-on-year increases, while AUM expanded and the expense ratio improved. The company also made notable progress in increasing its Non-Par business share and leveraging Bancassurance and Alternate Channels, despite a slight dip in overall policies sold and persistency ratios for certain cohorts.

    Highlights

    8

    • Total Premium Income grew by 9.02% YoY to ₹3,71,293 Crore.

    • Profit After Tax (PAT) increased by 16.68% YoY to ₹33,998 Crore.

    • Net Value of New Business (VNB) registered a growth of 27.96% YoY to ₹8,288 Crore.

    • Net VNB Margin improved by 170 basis points YoY to 18.8%.

    • Assets Under Management (AUM) grew by 8.01% YoY to ₹59,16,680 Crore.

    • Overall Expense Ratio decreased by 132 basis points YoY to 11.65%.

    • Non-Par share of Individual Annualized Premium Equivalent (APE) increased to 36.46% from 27.68% YoY, reflecting a 47.44% YoY increase in Non-Par APE.

    • Bancassurance and Alternate Channels (BAC) New Business Premium Income grew by 66.74% YoY to ₹3,341.37 Crore.

    Segment breakdown

    • Individual Business APE₹27,552 Cr38.5%
    • Group Business APE₹16,455 Cr23.0%
    • Individual Par Business APE₹17,507 Cr24.5%
    • Individual Non-Par Business APE₹10,045 Cr14.0%
    Donut· Share of Revenue

    Guidance & targets

    6
    CategoryTargetPriority
    Government Shareholding
    Government Shareholding Percentage
    90%
    		High
    Market Share
    Leadership Position
    maintain leadership
    		High
    Profitability
    Profitable Growth
    continuous sustained profitable growth
    		Medium
    Dividend
    Dividend Payout
    sustainable
    		Medium
    Digital Initiatives
    Digital-savvy Interface
    much more digital-savvy interface
    		Medium
    Health Insurance
    Stake in Health Insurance Company
    enhancing our stake
    		Low

    Risks & concerns

    5
    RiskSeverity

    Decline in Persistency Ratios

    Persistency ratios declined across most cohorts on both premium and policy count basis, attributed to low ticket size and higher payment frequency in older cohorts. Management is taking steps to improve. — Management acknowledged

    medium

    Market Share Loss

    Analysts raised concerns about market share loss. Management attributed this to market expansion with new players and emphasized focus on sustainable growth rather than just market share percentage. — Analyst downplayed

    low

    Impact of GST on VNB Margin

    The 2.8% operating impact on VNB margin includes GST. Management stated they are accommodating this through expense rationalization and increased affordability for customers. — Analyst acknowledged

    medium

    Areas of Evasion(2)

    • Specific breakdown of the 2.8% operating impact on VNB margin (GST vs. persistency vs. expenses)
    • Concrete future dividend payout ratio/policy

    Q&A highlights

    3

    “So, the favourable yield curve of Q3 of around 83 basis points -- 80 basis points, particularly of higher durations, that has impacted and contributed to an increase of 1.9%.”

    Clarifies the significant factors influencing the VNB margin improvement, including both positive economic factors and negative operational adjustments.

    asked by Madhukar from JP Morgan

    2 min read

    Detailed Narrative

    Life Insurance Corporation of India (LICI) reported a robust performance for the nine months ended December 31, 2025 (9MFY26), demonstrating significant growth across key financial and operational metrics. The company's Total Premium Income surged by 9.02% year-on-year (YoY) to ₹3,71,293 Crore. This growth was supported by a 5.89% increase in Individual New Business Premium Income to ₹44,941 Crore and a substantial 13.56% rise in Group Business Total Premium Income to ₹1,35,302 Crore. Profit After Tax (PAT) also saw a healthy increase of 16.68% YoY, reaching ₹33,998 Crore.

    Operational efficiency improved, with the Net Value of New Business (VNB) growing by 27.96% YoY to ₹8,288 Crore, and the Net VNB Margin expanding by 170 basis points to 18.8%. The Assets Under Management (AUM) reached ₹59,16,680 Crore, marking an 8.01% YoY growth. LICI maintained its leadership in the Indian life insurance market, with a 57.07% market share by First Year Premium Income. A strategic shift towards Non-Par products was evident, with the Non-Par share of Individual Annualized Premium Equivalent (APE) increasing significantly to 36.46% from 27.68% in the prior year, representing a 47.44% YoY increase in Non-Par APE.

    The company's distribution channels showed mixed results. While the overall number of policies sold saw a slight decrease, the Bancassurance and Alternate Channels (BAC) demonstrated exceptional growth, with New Business Premium Income soaring by 66.74% YoY to ₹3,341.37 Crore. BAC now contributes 7.45% of Individual New Business Premium, up from 4.73% YoY. The agency workforce also expanded to 14,72,370 agents. Claims processing remained efficient, with maturity claims increasing by 14.13% to ₹1,68,613 Crore and death claims by 3.23% to ₹18,156 Crore.

    During the Q&A session, management addressed analyst concerns regarding VNB margin drivers, attributing improvements to a favorable yield curve and business mix, while acknowledging a 2.8% operating impact including GST. They also discussed the decline in persistency ratios, explaining it was primarily due to older cohorts with low ticket sizes and high payment frequencies, and outlined ongoing interventions to improve these metrics. On the dividend payout policy, management indicated that the Board would make a decision after the full financial year results, emphasizing sustainability. The company also confirmed its evaluation of opportunities to enhance its stake in a health insurance company, without a specific timeline.

    Management expressed a bullish outlook, confident in delivering on commitments related to product mix, channel mix, profitability, and cost-effectiveness. They highlighted ongoing digital initiatives, including the DIVE project, aimed at enhancing customer and distributor interfaces. While the company provided extensive financial data, specific quantitative guidance for future financial performance beyond the regulatory target of reducing government shareholding to 90% by 2027 remained limited, with most forward-looking statements being directional. The persistency decline, though explained, remains a key area of focus for the company.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.