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LIC focuses on margin quality over aggressive growthThe insurer’s focus remains on improving the quality of growth rather than expanding market share at any cost.By Bhupendra Paintola  February 6, 2026, 8:41:19 PM IST (Published)3 Min ReadLife Insurance Corporation of India (LIC) is entering the final quarter of FY26 with a clear focus on steady improvement rather than chasing aggressive growth targets, according to Managing Director and Chief Executive Officer Doraiswamy. He said the insurer remains committed to improving product and channel mix, a strategy in place since the IPO that has begun to show consistent results.

“We are looking at a continuous improvement in our performance,” Doraiswamy said, reiterating that LIC does not provide formal guidance. “The two areas we have been focusing on from IPO days are product mix and channel mix, and both have shown considerable improvement in the current year over previous years.”

Shift in product and channel mix

Doraiswamy said LIC has seen a clear rise in the share of higher-margin non-participating (non-PAR) products and a higher contribution from bancassurance channels. “Our share of non-PAR has gone up, and our share from bancassurance has also gone up this time. The product mix has certainly helped in improving our VNB margins, and I expect that to continue a bit more,” he said.

The insurer’s focus remains on improving the quality of growth rather than expanding market share at any cost. While annualised premium equivalent (APE) growth is expected to consolidate around current levels, margin improvement remains the key priority.

VNB margin trajectory

In Q3FY26, LIC reported a new business premium of ₹56,787 crore, APE of ₹14,973 crore, and a VNB margin of over 21%. For the first nine months, VNB margins stood at 18.8%, compared with 17.8% for the full year last fiscal.

“You talked about nine months at 18.8%, whereas in quarter three alone, we have shown around 21% plus,” Doraiswamy said. “We expect this improvement in margins to happen in the next quarter also, and there will be some improvement over the current numbers when we close the year in March.”

While he avoided quantifying full-year margins, he said margins would “certainly improve” over last year, supported by ongoing cost rationalisation.

APE Growth and Expense Control

On APE growth, Doraiswamy said LIC has largely stabilised its market share. “We have reached 36.8% as of now. From quarter two to quarter three, there has not been a big variation. We will be consolidating at this range,” he said, adding that any further increase would be incremental rather than sharp.

He said improvement in VNB margins would also come from tighter expense control. “We have been rationalising our expense ratio, so we expect some more improvement in VNB margins,” he said.

GST impact and operating variances

Addressing concerns around GST impact, Doraiswamy said the group business, though nearly half of LIC’s portfolio, involves minimal commission and is largely direct. “You cannot exactly take it as 50-50%,” he said. “We are continuously analysing it.”

He said the current GST estimate could see some rationalisation once a full-year analysis is completed. “I do not see too much of an improvement, but there will be some improvement,” he added.

On operating assumptions impacting VNB margins, Doraiswamy said input tax credit issues in the quarter had added pressure but would be absorbed through overall expense reduction. “Going forward, there will be improvement in this area as well,” he said.Continue Reading(Edited by : Ajay Vaishnav)TagsLife Insurance Corporation