Doraiswamy indicated that the insurer will concentrate on alterations in product mix, distribution strategy, and operational efficiency to boost profitability and uphold growth momentum. He noted that while LIC is cautious regarding the effects of global crises on consumer savings and insurance demand, it expects growth trends to persist if conditions normalize.
LIC recorded a 42% increase in the value of new business (VNB) in 2025-26 (FY26), with VNB margins rising by approximately 360 basis points.
The insurer reported strong performance in April and anticipates that growth momentum will carry through May and the remainder of the financial year. However, Doraiswamy cautioned that prolonged geopolitical tensions could influence household saving behaviors and investments in life insurance.
While he refrained from providing specific guidance, he mentioned that LIC aims to achieve at least double-digit growth on the top line. He also pointed out that the company will continue efforts to enhance VNB margins, without committing to a precise target for FY27.
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Since its listing on the stock exchanges, LIC has prioritized improving profitability. Doraiswamy explained that the company’s strategy as a public entity encompasses adjustments to product mix, distribution strategy, and operational efficiency, all of which have positively impacted recent financial performance.
Doraiswamy asserted that liquidity is a critical factor influencing LIC’s share price performance. The company has recently announced a 1:1 bonus issue and increased dividend payouts to boost market participation and returns for shareholders.
The insurer’s current market capitalization stands at ₹5,15,487.31 crore, with its shares having declined by over 3% in the past year.
These are edited excerpts from the interview.Q: LIC reported growth across premium collections, APE, VNB, and margins in FY26 despite market volatility. What were the key drivers behind this performance, and how do you see FY27 shaping up?
A: We have maintained a continuous focus on enhancing the corporation’s performance. For the past four years, we have consistently worked towards this goal, implementing strategic shifts post-public listing. These efforts, supported by a singular focus, have significantly contributed to improved performance.
Our emphasis has been on altering the product mix, evolving the distribution strategy, and enhancing operational efficiencies. Collectively, these areas have yielded positive results, particularly in the latter half of the previous year and throughout the fiscal year, reflected in robust growth across net premiums, APE, VNB, and margins.
This unwavering focus will persist, and I am optimistic that FY27 will follow a similar trajectory. We are, of course, mindful of the market volatility stemming from ongoing crises, but we remain confident in our ability to achieve positive results.
Q: Given that we have completed the first two months of the financial year, can you provide insights on performance post-April? Are you seeing continued growth in May, and what are your expectations for initial quarter AP growth?
A: We aim to sustain decent growth in light of current market conditions. April showed promising results, and we aspire to maintain that growth trend into May and throughout the financial year.
The long-term impact of the current crisis on individuals remains uncertain, but if the situation endures, it could affect people’s priorities regarding savings through life insurance. However, we hope for a prompt resolution, allowing us to sustain our growth momentum.
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Q: Regarding FY27 numbers, FY26 saw your VNB grow by about 42%, and margins improving by 360 basis points. What internal targets do you have for FY27 regarding APE, individual APE, total AP, etc.?
A: As an organization, we generally do not provide specific guidance. Our focus remains on strengthening industry growth through LIC’s expansion. We aim to grow the overall market and work towards our vision of insurance for all by 2047. For this to materialize, strong growth is essential, and the regulator has previously indicated the expected growth trajectory for the industry.
We seek to rise to this challenge and perform at higher levels, although we will aim for nothing less than double-digit growth.
Q: On the top line?
A: Yes.
Q: Reflecting on FY26, you achieved a 360 basis point enhancement on margin, even amid various challenges. If FY27 improves, might you aim for a similar increase in VNB margins, potentially setting a target around 25%?
A: I would certainly aspire to that figure, but much relies on market dynamics. Operational challenges exist, and while we are keen to build upon our current VNB margins, making such aggressive projections at the outset is not something I’m inclined to do. Nonetheless, we will strive to enhance our margins this year.
Q: Is achieving 25% possible if conditions are favorable?
A: Our goal has been to align our VNB margins with industry standards, though reaching that may require time. We are diligently working towards this objective.
For the full interview, watch the accompanying video
Q: Despite solid growth in embedded value over the past few years and this fiscal year, the share price has not reflected this growth. What do you believe is hindering this? If you were to advise your shareholder, the Government of India, would you attribute this issue to liquidity, or are there additional factors to consider?
A: Liquidity is certainly a significant part of why the share price is not realizing its true value. Observing the Bank of Maharashtra, for example, as liquidity improves, valuations tend to rise as well. This remains a concern.
To enhance liquidity, we have initiated a 1:1 bonus issue, effectively doubling the number of shares available to the market, excluding the government, and have declared a substantial dividend on top of that.
Last year’s payout was ₹12 based on the pre-bonus share count. This year, we plan to distribute ₹10 per share, pending shareholder approval, on the doubled share count, representing a 66% increase in dividend.
We anticipate that the market will recognize LIC’s growth trajectory, resulting in better perceptions and valuations over time. We expect improvements across multiple areas — our performance metrics, shareholder rewards, and government actions, especially those enhancing market float — to positively influence LIC shares’ valuation, allowing them to reflect their inherent value.
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