LIC's H1 FY26 Performance: Navigating Growth and Digital Transformation

Life Insurance Corporation of India (LIC) has demonstrated a robust financial performance in the first half of fiscal year 2026 (H1 FY26), marked by significant profit growth and strategic shifts in its product portfolio. Despite facing headwinds in certain segments, the company's overall trajectory reflects a focused approach towards enhancing profitability and operational efficiency. The management's commentary highlights a commitment to digital transformation and leveraging regulatory changes to expand market penetration.

For H1 FY26, LIC reported a total premium income of INR 2,45,680 crore, registering a growth of 5.14% year-on-year. The Profit After Tax (PAT) saw a substantial increase of 16.36% year-on-year, reaching INR 21,040 crore. This strong bottom-line performance was complemented by an improved Net Value of New Business (VNB) margin, which rose by 140 basis points to 17.6%. The company's Assets Under Management (AUM) also grew by 3.31% to INR 57,22,896 crore. These figures underscore LIC's financial resilience and its ability to generate value amidst a dynamic market environment.

Strategic Product Mix and Digital Push

A pivotal aspect of LIC's strategy in H1 FY26 has been the deliberate shift towards non-participating (non-par) products. The share of non-par business in individual Annualized Premium Equivalent (APE) increased significantly from 26.31% in H1 FY25 to 36.31% in H1 FY26. This strategic realignment is a key driver behind the improved VNB margin, alongside favorable Risk-Free Rate (RFR) movements. The company also reported over 100% growth in Unit Linked Insurance Plans (ULIPs), indicating successful efforts to capture evolving customer preferences. New product launches, including LIC's Nav Jeevan Shree and LIC's Nav Jeevan Shree Single Premium in July 2025, and LIC's Jan Suraksha and LIC's Bima Lakshmi in October 2025, are designed to enhance affordability and expand market reach, especially benefiting from the recent GST exemption on life insurance products.

LIC's commitment to digital transformation is evident through several initiatives. The 'LIC DIVE' app aims to be a comprehensive one-stop solution for all insurance and policy servicing needs. For its vast agent network, the 'Super Sales Saathi' and 'Ananda' apps were made live in August-September 2025, enabling agents to conduct business digitally and enhancing their productivity. The Ananda app alone facilitated 8.78 lakh policy completions in H1 FY26, marking a 21.46% year-on-year growth. Furthermore, the operationalization of a new Datalake platform is set to support advanced AI/ML use cases, driving business objectives and growth.

Distribution Strength and Social Impact

Despite a 3.54% year-on-year drop in individual new business premium and a 20.83% decline in the total number of policies sold in H1 FY26, attributed to regulatory changes and the anticipation of GST exemption, LIC's distribution channels showed resilience. The Bancassurance and Alternate Channels recorded a significant 67.62% growth in new business premium, contributing INR 2,024.10 crore. This diversification complements LIC's extensive agency force, which remains the largest in India, with 14.85 lakh agents as of September 30th, 2025.

LIC's social commitment is highlighted by initiatives like the 'Bima Sakhi Yojana,' launched in December 2024 to empower women as Mahila Career Agents. As of September 30th, 2025, this scheme has appointed 2.57 lakh MCAs, selling 8.54 lakh policies and generating INR 1,096 crore in new business premium, with significant contributions from rural areas. The company's broader ESG efforts, including substantial investments in renewable energy and various community development projects through the LIC Golden Jubilee Foundation, further underscore its role in sustainable development.

Outlook and Management Confidence

Management expressed confidence in overcoming the temporary setbacks in individual policy sales, expecting to catch up by the end of the current financial year. The focus for the second half of FY26 will be on substantially increasing the top line, improving profitability through enhanced ticket sizes, and expanding annuity and savings businesses. The positive trajectory of the VNB margin is expected to continue in the medium to long term, driven by the sustained momentum in non-par products and ongoing operational efficiencies. LIC's overall expense ratio decreased by 146 basis points to 11.28%, reflecting effective cost management.

LIC's H1 FY26 performance reflects a strategic pivot towards higher-margin products, a strong push for digital adoption, and a continued commitment to its vast distribution network and social objectives. The company is well-positioned to capitalize on India's growing insurance market, driven by increasing household savings and government support for insurance penetration. The management's clear articulation of strategy and proactive measures instill confidence in the company's ability to achieve sustained growth and deliver value to its stakeholders.