LIC may take a small hit due to an increase in provisions linked to Input Tax Credit (ITC). However, the main impact of GST was felt on the expense ratio, while the value of new business (VNB) margin is expected to remain largely unaffected. “All assumptions put together, the impact has been less than 1 percent so far,” LIC CEO R Doraiswamy said in a post-Q2 FY26 interaction with the press on November 6.
Life Insurance Corporation of India (LIC) has confirmed that the benefits of the recent GST reduction will be passed entirely to customers, without transferring any burden to agents.
The insurer expects that exemptions on life insurance products will boost business volumes, support top-line growth, and provide opportunities to optimise expenses.
Doraiswamy said that LIC will continue focusing on margin growth despite a marginal hit from ITC-linked provisions. VNB at the end of Q2 FY26 for the PSU was 17.6 percent versus 16.2 percent last year.
LIC’s annual premium equivalent (APE) growth in the first half of FY26 was muted, attributed to last year’s master circular and a complete revamp of products to comply with the September 30 deadline, the CEO said.
The CEO attributed the subdued performance to a high base in the previous year but expressed optimism for robust growth in the second half. “We are seeing good traction in the second half of the current year,” he added.
On the non-participating (non-par) segment, LIC reported growth but said it is not targeting a specific market share. The company has been focusing on non-par products since its listing. “We think with 36.31 percent, we have reached enough momentum on non-par, and definitely with all the efforts we have taken in the past, we hope for it to stabilise. We are not exactly targeting a number,” Doraiswamy explained.
LIC’s overall market share has dipped below 60 percent for the first time this financial year, which the CEO largely attributed to GST-related changes in September. The company expects recovery in the second half, he said. “The first half saw a different vibe, particularly due to the change in GST. We are showing good growth in the second half."
The insurer’s digitalisation initiatives are progressing steadily, with internal testing and pilot runs underway. A new platform version is expected to launch soon, Doraiswamy confirmed. Doraiswamy emphasized that the platform will continue to evolve, but the project remains on track.
Life Insurance Corporation of India (LIC) on November 6 reported a standalone net profit of Rs 10,053.39 crore for the second quarter of the financial year 2026. This marks a 32 percent year-on-year (YoY) rise from the Rs 7,620.86 crore net profit reported in the same period last year.
The firm's net premium income meanwhile grew 5.5 percent year on year to Rs 1.26 lakh crore during the quarter under review. Solvency ratio increased to 2.13 percent from 1.98 percent in the year-ago period, while asset quality for policyholders' funds improved.
However, the profit after tax (PAT) was down 8 percent on a sequential basis compared to Rs 10,957 crore in Q1 FY26 notwithstanding a 6 percent growth compared to Rs 1,19,618 crore in the April-June quarter of FY26.
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