LIC's profit rises 20 per cent to ₹12,115 crore in second quarter

Life Insurance Corporation of India (LIC) has reported a net profit of ₹12,115 crore in the second quarter (Q2FY27) ended September, marking a 20 per cent increase compared to the same period last year. According to a report by The Hindu, this profit was made possible due to robust growth in premiums and improvements in business margins.

The company's net premium income increased by 16.2 per cent, reaching ₹1.47 lakh crore. Single premium income was a major contributor to this growth, rising 34.5 per cent to ₹68,425 crore. Additionally, Annualised Premium Equivalent (APE) grew by 5.72 per cent to ₹30,696 crore, while expenses saw a decline of 1.13 per cent, standing at ₹15,061.5 crore.

LIC's Value of New Business (VNB) rose by 33.95 per cent to ₹6,846 crore, resulting in the VNB margin increasing by 470 basis points to reach 22.3 per cent. The company's Assets Under Management (AUM) increased by 4.16 per cent to ₹59.61 lakh crore.

The company expects further improvement in VNB margins due to improvements in product mix and growth in high-margin segments, particularly non-participating (non-par) savings and term insurance. Non-par savings business grew by 35 per cent to become 13 per cent of the total business mix, up from the previous 10.7 per cent, while the term insurance business saw an increase of 87 per cent. This margin expansion also benefited from favourable movements in the Risk-Free Rate (RFR).

Managing Director and CEO R. Doraiswamy stated, “We launched a new pure-term insurance product in September, which has received a very good response. In the last few days of September alone, more than 58,000 policies were sold under this scheme.” He further added that from now on, the company's primary focus will be on pure-term protection products, non-par savings products, and annuity business.

Regarding the proposed sale of IDBI Bank's Fairfax Financial Holdings, LIC stated that under the open-architecture model, the bank can continue the distribution of its insurance products, which allows banks to offer products from multiple insurance companies. Along with this, LIC stated that it is expanding its bancassurance network, and several banks have joined in the last two quarters.