Fortune 500 India: LIC’s growth mantra in a disruptive world

ON JANUARY 20, 2025, 452,839 agents of Life Insurance Corp. of India (LIC) fanned out and sold 588,107 policies, earning the corporation a Guinness World Record for the “Most Life Insurance Policies Sold in 24 Hours”. The unique name chosen for the day was “Mad Million Day”. When Siddhartha Mohanty, the-then CEO and MD, announced the feat during the FY25 earnings call on May 27, 2025, his voice carried the quiet pride of a man who knew the machine was still unmatched in sheer scale. “Before I proceed further,” he told analysts, “I would like to mention that the procurement of individual new business premium of ₹62,495 crore is the highest ever in the history of LIC.” That record-breaking January day and record-breaking full-year individual new business number is visible proof that the giant still knows how to move when it chooses to. But the real story is the rapid, deliberate shift from low-margin participating products to high-margin non-participating ones. Participating policies share profits with bonuses, while non-participating ones offer guaranteed benefits. Around five months into his tenure, on November 6, 2025, R. Doraiswamy, who took over as CEO and MD in July, addressed analysts for the H1FY26 results. The tone was the same: calm, confident, understated. But the message was sharper. “Regarding the upper limit where non-par share may peak, we had suggested that we have enough wind behind our sails and the momentum has been built in favour of non-par product mix change,” Doraiswamy said. That the share of individual non-par APE (annualised premium equivalent) mix stood at 36.31% is a testimony to the momentum. In just 18 months (from 18.32% in FY24 to 27.69% in FY25 and 36.31% in H1FY26), LIC has engineered one of the fastest product-mix pivots, a quiet revolution no one saw coming from a 69-year-old government behemoth. This shift is not cosmetic. It is strategic. It has directly amplified profitability, pushing LIC’s value of new business (VNB) margin to 17.6% in both FY25 and H1FY26, levels associated with best-performing private insurers. And, as LIC’s actuaries explain, margins in the individual business are nearing 21%, a number unthinkable a few years ago. The trajectory speaks for itself. At the close of FY25, LIC held 66.83% of the country’s total policy count and 57.05% of premium share, managing a staggering ₹54.52 lakh crore in assets. By H1FY26, that asset base has risen to ₹57.23 lakh crore, peppered by market shares of 63.44% in policies and 59.41% in premiums. For decades, LIC grew by doing one thing better than anyone else: selling participating endowment plans to a trusting middle class that wanted safety and bonus. It became the default choice for crores of Indians. But the cost of that dominance was razor-thin margins on participating products and VNB. But all that’s changing. Profitability, long seen as LIC’s Achilles’ heel, is turning into its strength. FY25 closed with a PAT of ₹48,320 crore, an 18.10% jump year-on-year. The first half of FY26 delivered another ₹21,040 crore, rising 16.36% YoY. Doraiswamy is focussed on the quality behind the numbers: “We have kept our focus on costs… the overall expense ratio has come down significantly.” Persistency, a key sign of customer trust, also improved in several long-term cohorts, particularly at the 37th and 61st-month marks. Even where short-term persistency dipped, Doraiswamy attributed it not to customer fatigue, but earlier product designs that have been corrected. “With higher ticket size policies and redesigned features, persistency will be much better in the days to come,” assured Doraiswamy. By March 2027, it is entirely plausible that LIC’s individual non-par APE share touches 45-50%. At that point, VNB margins could sustainably cross the mid-teens (from 9–10% embedded value margins historically), and the stock would still be trading at a discount to private peers on price-to-embedded-value. The market is slowly waking up to this. The stock price has already more than doubled from its post-listing lows, but the re-rating is still in early innings. All these point to a year of careful execution, and LIC’s top management believes the company is moving in the right direction. Doraiswamy is optimistic that the changes in the Goods & Services Tax (GST) will benefit the entire insurance sector. “We at LIC are very optimistic about the positive impact of the GST changes announced for the insurance industry. These changes are in the best interest of customers and will lead to further accelerated growth of the life insurance industry in India,” he said. In fact, LIC has passed on all the benefits of these changes to customers and remains committed to expanding insurance penetration as it works towards the long-term goal of Insurance for All by 2047. During H1FY25, LIC also demonstrated progress on its product and channel diversification strategy, which it has been pursuing since its stock market listing. The company is also expanding its reach beyond traditional agency networks. The bancassurance and alternate channels contribute 7.12% of individual new business premium, significantly higher than 4.1% last year. The growth highlights LIC’s efforts to become more modern and accessible, especially in urban and semi-urban markets. However, some parameters indicate pressure. The number of individual policies sold decreased by 20.83%, and persistency ratios — both for the 13th month and 61st month — dropped against last year. This suggests that agents face difficulties in maintaining customer activity over the long term, and LIC will need to address these issues in the coming months. From the stock market perspective, LIC’s performance continues to reflect broader economic trends. Equity strategist Kranthi Bathini of WealthMills Securities explains that LIC behaves almost like a mirror to the capital markets. “Beyond its core life insurance business, LIC is often seen as a proxy for the Indian capital markets because of its large equity holdings across companies.” LIC’s share price has not shown dramatic swings. “It moved from about ₹700 to ₹1,000 and has now settled around ₹900. For investors with a long-term horizon, LIC remains a strong name in India’s financial services and insurance space. One structural challenge, however, continues to weigh on investor sentiment — the government’s 96.5% ownership of LIC. This leaves very limited free float for institutional investors. “When the promoter holding is this high, firms often need to dilute over time. That becomes an important factor for institutions before making any serious investment,” Bathini explains. This is likely to remain a key point of discussion as the government considers its next round of divestment. Over the next year, analysts expect LIC to focus on improving margins, strengthening its non-par product lines, enhancing distribution productivity, and expanding insurance coverage across India. With the solvency ratio increasing from 1.98 to 2.13 (as on September 30, 2025), LIC has financial strength to pursue growth without compromising stability. LIC’s fabled army of 14.87 lakh (nearly 1.5 million) agents is one of the largest human distribution networks in the world. More than 98% of its policies are still being sold by agents. But what’s changing is how these agents operate, how they are being trained, and the new frontline models that are emerging. One such innovation is the Bima Sakhi initiative, launched in late 2024. By FY25, 149,000 women had been appointed as Bima Sakhis, selling 471,000 policies and generating ₹604 crore in new premium. By H1FY26, that number had surged to 257,000 Bima Sakhis, covering 44% of India’s gram panchayats. That distribution might is only strengthening the moat at LIC, which controls nearly 72% of India’s total life insurance AUM. With a modern product mix, sharper digital tools, surging profitability, and a distribution force, LIC wants to ensure that its legacy remains enduring in a disruptive landscape.

Fortune 500 India: LIC’s growth mantra in a disruptive world

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