LICI - LIFE INSURANCE CORPORATION OF INDIA Share Price

During the earnings conference call for Q1 FY'26 on August 7, 2025, Life Insurance Corporation of India (LIC) management provided strong optimism about the company's performance.

Key outlook highlights include:

1. Market Share: LIC reported a market share of 63.51% in First Year Premium Income for the quarter, up from 64.02% year-over-year. The segmentation shows individual business at 38.76% and group business at 76.54%.

2. Premium Income: Total Premium Income reached Rs. 1,19,200 Crore, a 4.77% increase from Rs. 1,13,770 Crore in Q1 FY'25, with Individual New Business Premium at Rs. 12,536 Crore, marking a 5.42% growth YoY.

3. Profit After Tax (PAT): PAT grew by 5.02%, totaling Rs. 10,986 Crore for the quarter.

4. Value of New Business (VNB) and Margins: VNB surged by 20.75% to Rs. 1,944 Crore. VNB margin improved by 150 basis points to 15.4%.

5. Assets Under Management (AUM): AUM increased by 6.47% to Rs. 57,05,341.44 Crore.

6. Agent Workforce Growth: The total number of agents rose to 14,86,222, up 4.31% YoY.

7. Expenses: The expense ratio decreased significantly to 10.47%, down from 11.87% YoY, indicating better operational efficiency.

8. Digital Initiatives: Management is pursuing digital transformation, enhancing customer engagement through technology, and is in advanced stages of launching digital applications.

9. Health Insurance Entry: Although not yet a direct player, management is evaluating entering the health insurance market, focusing on investment opportunities pending regulatory changes.

The management's focus on optimizing product offerings and enhancing digital capabilities positions LIC to sustain growth and profitability amid a changing industry landscape. They are committed to increasing value for stakeholders and improving overall market valuation.

Q&A Section Summary

Question 1: "In terms of the growth in the individual business, I wanted to understand how this is playing out. What about the margins for ULIP products?"

Answer: "Our individual non-par APE has grown by 32.63%, focusing on high-margin products. The preference has shifted towards non-par guaranteed products, which yield higher margins. While ULIPs are growing, they are on a comparatively lower base, and we are maintaining margins across other segments. Thus, growth in ULIPs enhances VNB numbers without significantly impacting overall margin."

Question 2: "What is your strategy on the agency channel given recent volatility?"

Answer: "We increased our agency count by about 61,000, with a noticeable rise in average ticket sizes by 23%. Despite a slight dip in policy numbers sold, the overall productivity is improving, driven by training existing agents and targeting millennials for recruitment."

Question 3: "Could you clarify the current solvency ratio and your dividend policy?"

Answer: "Our solvency ratio is currently at 218%, up from 200%. We consistently aim to increase dividends sustainably; this year, we've proposed Rs.12, up from Rs.1.5 at listing. Retaining capital for growth while improving dividends is vital for us."

Question 4: "Any guidance on margin profiles for FY '26?"

Answer: "We anticipate that as the non-par business share increases, margins will follow suit. Enhancements in non-par products will likely increase the overall margins for this fiscal year compared to FY '25."

Question 5: "What's your take on the health insurance market?"

Answer: "We're evaluating options for entering the health insurance space, possibly by acquiring a stake in a health insurance company. We're monitoring upcoming regulatory changes before making a decisive foray into this segment."