LIC Q2 net profit rises 20% to Rs 12,076 crore on higher premium income

New Delhi: Life Insurance Corporation of India (LIC) reported a 20 percent year-on-year increase in standalone net profit to Rs 12,076 crore for the second quarter of FY27, compared to Rs 10,053 crore in the corresponding quarter of the previous fiscal, driven by higher premium collections and growth in renewal business.

The state-owned insurer's total income rose to Rs 2,62,739 crore in the July-September quarter of FY27 from Rs 2,39,614 crore a year earlier, according to its regulatory filing.

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LIC's net premium income increased to Rs 1,47,018 crore during the quarter, against Rs 1,26,479 crore in the corresponding period of FY26. Renewal premium collections grew to Rs 68,375 crore from Rs 64,996 crore, while first-year premium declined marginally to Rs 10,432 crore from Rs 10,836 crore.

LIC Chairman and Managing Director R. Doraiswamy attributed the decline in first-year premium partly to subdued market conditions, which tend to affect investments in unit-linked insurance plans (ULIPs).

For the six months ended September 2026, LIC's Value of New Business (VNB) increased 33.95 percent to Rs 6,846 crore from Rs 5,111 crore in the year-ago period. The net VNB margin also improved by 470 basis points to 22.3 percent, compared to 17.6 percent in the first half of the previous fiscal.

Doraiswamy indicated that the company expects scope for further improvement in VNB margins during the third and fourth quarters, supported by its focus on increasing ticket sizes.

On the proposed stake sale in IDBI Bank, Doraiswamy said the development is unlikely to have a significant impact on LIC's bancassurance business, as the partnership operates under an open architecture model. He added that LIC has entered into bancassurance partnerships with RBL Bank and Yes Bank, with the benefits expected to become visible in the second half of FY27.

The Central government and LIC hold 45.48 percent and 49.24 percent stakes, respectively, in IDBI Bank. The government has approved the sale of a combined 60.72 percent stake in the bank to Canada's Fairfax Financial Holdings for approximately Rs 53,000 crore.

Commenting on the proposed changes to the insurance distribution framework, Doraiswamy expressed optimism about the revised commission regulations announced by the Insurance Regulatory and Development Authority of India (IRDAI) in September 2026. He said the changes are expected to benefit customers and accelerate the growth of India's life insurance industry.

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Meanwhile, LIC's total expenses increased to Rs 2,52,116 crore in the September quarter from Rs 2,30,160 crore in the corresponding period last year.

The insurer's Assets Under Management (AUM) rose 4.16 percent year-on-year to Rs 59,60,941 crore as of September 30, 2026, compared to Rs 57,22,896 crore a year earlier.

LIC's solvency ratio improved to 2.35 from 2.13 at the end of the corresponding quarter last fiscal. However, its Indian Embedded Value (IEV) declined 1.95 percent year-on-year to Rs 7,97,378 crore as of September 30, 2026, from Rs 8,13,230 crore a year earlier.

Doraiswamy also noted that profit booking from asset monetisation was marginally lower during the quarter compared to the year-ago period, owing to volatility in the equity markets.

The company said it is focusing on diversifying its product and distribution channel mix while optimising costs to strengthen overall profitability.

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