Doraiswamy said the insurer will continue focusing on product mix changes, distribution strategy and operational efficiency to improve profitability and maintain growth momentum. He added that LIC remains cautious about the impact of global crises on consumer savings and insurance demand but expects growth trends to continue if conditions stabilise.
LIC reported a 42% rise in the value of new business (VNB) during 2025-26 (FY26), while VNB margins expanded by around 360 basis points.
The insurer said April performance remained strong, and it expects growth momentum to continue through May and the rest of the financial year. However, Doraiswamy warned that prolonged geopolitical tensions could affect household savings behaviour and life insurance investments.
He refrained from giving guidance but added that LIC would aim to maintain not less than double-digit growth on the top line. He also said the company would continue working towards improving VNB margins, although he avoided committing to a specific target for FY27.
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LIC has been focusing on improving profitability since listing on the stock exchanges. Doraiswamy said the company’s strategy after becoming a public entity included changes in product mix, distribution mix and operating efficiency, all of which have supported recent financial performance.
Doraiswamy said liquidity remains one of the key factors affecting LIC’s share price performance. The company recently announced a 1:1 bonus issue and higher dividend payouts to improve market participation and shareholder returns.
The insurer currently has a market capitalisation of ₹5,15,487.31 crore. Its shares have declined more than 3% over the last 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: It has been a continuous focus to see that the corporation improves its performance. Over the last four years, we have been continuously focused on this, and we had taken some directional shifts once we went public. Those efforts, with continuous single-point focus, have helped the corporation improve its performance.
We have been focusing on a change in the product mix, we have been focusing on a change in the distribution mix, as well as improvement in operational efficiencies. All three have been giving good results, and we performed very well in the second half of last year and the entire financial year as well we have shown good growth in all the numbers, be it the net premium that we have collected, or the APE, or the VNB, and the margins as well.
So, it has been a continuous focus on improving all these areas, and this focus will continue. I am sure FY27 will also progress in this direction. Of course, we are also wary of the volatility in the market due to the crisis that is unfolding, but we are confident that we’ll be able to do well in spite of that.
Q: Before I come to specific numbers for the coming financial year, the first two months have gone, with the first entire month and about 20 days of the next month of the first quarter already completed. In the fourth quarter, there was a lot of chatter that there could be some postponement of buying because of the geopolitical issues. April has been good. We saw the numbers. What about the next month after April? Has the performance kept up the pace seen in April? And for the first quarter itself, what is the AP growth that you’re expecting to come in for the company?
A: We would like to maintain a good, decent growth given the market conditions. We would like to do well. April has been good, and the performance has been good. We would like to continue that kind of growth for the month of May as well, and for the entire financial year.
Of course, the impact of the current crisis on individuals, only time will tell, but if the crisis persists for long, it can certainly have an impact on people’s focus on savings or ability to save through life insurance. But we hope that this gets resolved very fast, and we are able to continue our growth momentum the way that we have been growing. We expect to continue to grow.
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Q: Let’s speak about some of the numbers for FY27. FY26 saw your VNB growing at about 42%. The margins grew by about 360 basis points. As far as APE is concerned, individual APE grew at 13%, and total AP grew at 18%. On all four of these counts, what is the internal target or the ambition for FY27, if you have to outline that for the investors?
A: No, as an organisation, we have been staying away from giving guidance to the market or anything like that, so our focus will be to see that the industry’s growth is strengthened by LIC’s growth. We would like to see that the industry grows, the pie grows, and together we march towards insurance for all by 2047. For that to happen, the growth has to be good, and the regulator is on record about the kind of growth that is expected from the industry for the years to come.
We would like to rise up to the challenge. We would like to see that we perform at a much higher level, but of course, we would not like to be at less than double-digit growth. That is what we will look at.
Q: On the top line?
A: Yes.
Q: If you look at FY26, you added about 360 basis points on the margin front. This was a difficult year for various reasons. Let’s assume and hope that if FY27 is a better year, one can expect that you would add about, if not more than, the same amount to your VNB margins in FY27? And if that is done, then your target could be about 25%?
A: I would certainly like to look at that kind of number, but much depends upon how the market pans out. There are a lot of operational challenges in front of us. We would certainly like to expand on the growth that we have reached on the VNB margins, but taking that kind of an aggressive call to begin with, I would not like to make such an aggressive call to start with. But we will continue to work towards improving our margins in the year. That’s for sure.
Q: How do you see it as achievable if it’s a good year? Is 25% in the realm of being achieved?
A: We have been saying that we would like to match the industry in terms of VNB margins, but it may take some time for us to reach that. But we are working towards it.
For the full interview, watch the accompanying video
Q: Over the previous three to four years, we’ve seen decent growth when it comes to embedded value. The same goes for this year. The share price has not been responding to the kind of growth in the numbers, the top line, the margins, and the embedded value. What do you think is lacking at this point in time? And if you, of course, had to advise your shareholder, the Government of India, as the management of the company, is this just a question of liquidity, or is there more to it that you would want them to look at?
A: Liquidity is certainly one of the factors behind the share realising its value. If you look at the Bank of Maharashtra experience, when liquidity improves, naturally, the valuation also goes up. That is one thing.
Currently, liquidity is a matter of concern, but to address that, we have come up with a 1:1 bonus issue. So, the number of shares in the hands of the market, other than the government, has doubled, and we have also declared a good dividend on top of it.
Last year, we paid ₹12 on the pre-bonus number of shares. Now we have announced ₹10, of course, subject to the approval of the shareholders, per share on double the number of shares. Through this, a 66% growth in the dividend has also been achieved.
We expect the market to recognise the growth story of LIC, and the perception as well as its valuation should improve. This is our expectation. I am sure, as things pan out across multiple areas — one, our performance numbers; two, the rewards to the shareholders; and three, the government actions, particularly in terms of enhancing the float available in the market — all these things will improve the valuation of the LIC shares, and certainly it is likely to realise its potential value.
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