Life Insurance Corporation of India ($LICI)

Ladies and gentlemen, good evening, and welcome to the LIC's FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. We have senior management of LIC led by Mr. [indiscernible], CEO and MD on this call. I now hand the conference over to Mr. [indiscernible], CEO and MD, LIC. Thank you. And over to you, Mr. [indiscernible].

Good evening, everyone. I'm [ Doraiswamy ], Chief Executive Officer and Managing Director, I I would like to welcome all of you to the results and performance update for the year ended March 31, 2026. I also extend my gratitude to you for joining this call in the later hours of the evening today. Our [indiscernible] declared today have been uploaded along with the press release and the investor presentation on our website as well as the website of both the BSE and NSE. Along with me on this call, I have Managing Directors, [indiscernible] [indiscernible], CFO from the finance team; [indiscernible], Execute Director, Investment Front Office and CIO from the investment team. From the marketing team, we have Mr. [indiscernible], [indiscernible] [indiscernible] Pension and Group teams. Also, we [indiscernible], Executive Director, CRM Policy Servicing; Ms. [indiscernible], Execute Director, CRM; and shy Sanjay Bajaj, Head Investor Relations on this call. I would now like to present the key business operational and financial performance highlights for fiscal year ended March 1, 2026. Market share. Our market share by first premium by first share income for the year and 31st March 2026, is 56.6% IRDAI as compared to 57.05% for a similar period ended 31st March 2025. Therefore, we continue to maintain our [indiscernible] Indian insurance market across both individuals and good businesses. Now if we break down this overall insurance market share of 56.6% into segment-wise shares of the individual and group business, we would have a market share of 36.6% in individual business and 70.11% in the group business for the year ending 31st March, 2026. On a comparable basis, for the year ending 31 March, 2025, the respective market share for individual and group business [indiscernible] 37.46% and 71.19% respectively. Premium income. For the year ended 31st March 2026, we have reported a total premium income of INR 5,35,984 crores as compared to total premium income of INR 4 lakh 88148 crores, for ending 31, 2025, reducing a growth of 9.8% on a year-on-year basis. The individual new business premium income for the year ended 31st March, 2026, was INR 67,676 crores as compared to INR 62,495 crores for the similar period ended 31st March, 2025, thereby registering an increase of 8.29% on a year-on-year basis. Renewal premium income of individual business for the year ended 31 March, 2026, was INR 2 lakh 71,699 crores as compared to INR 2 lakh 56,541 crores, for the year ended March 31, 2025, registering a growth of 5.91% on a year-on-year basis. Therefore, for the year ended 31 March, 2026, our total individual premium income, including renewals was INR 3 lakh 39,375 crores as compared to INR 3 lakh 19,,036 crores for the previous year, registering a growth of 6.37% on a year-on-year basis. The group business totaled premium income for the year ended 31st Match, '26, was INR 1 lakh 96,609 crores, comprising new business premium of INR 1 lakh 92,912 crores. In comparison, for the year ended 31 March '25 the group business to our total premium income was INR 1 lakh 69,112 crores comprised new business premium income of INR [indiscernible] crores. Therefore, for the year ending 31 March, '26, the total grow premium has increased by 16.26% as compared to previous year ending 31 March, '25. We break our business on an APE basis. The total annualized premium equivalent for the year ended 31 2026, is INR 66,961 crores, which comprised individual APE of INR 43,335 crores and group of INR 23,626 crores. Therefore, on an APE basis, the individual business accounts for 64.7% and group business accounts 35.28%. Further, the individual APE, the PAR business accounts for INR 28,121 crores and [indiscernible] amounts to INR 15,214 crores. Therefore, our [indiscernible] 35.11% and part is 60.89% for [indiscernible] As you recall, 2025, our non-par share of total individual business based on too at 27.9%. Since then, our nonphase increased from INR 1,581 crores to INR 214 crores, reflecting an increase of 43.78% on a year-on-year basis. At this point, I'd like to take you back to our 9-month results for the period in 31 December 2025 when a comparable nonpar APE share within individual business was 36.6%. We had mentioned that that our effort would be to consolidate our [indiscernible] gains for some time and the full year numbers, we will now intense money of that consolidation. Profit after tax -- the PAT for the year ended 26 was INR 574 crores as compared to INR 48,151 crores for the last year, seeing a growth of 19.25% on a year-on-year with VNB and VNB margins. that net VNB has registered a growth of 41.6% on a year-on-year basis to INR 14,178 crores for the year ended 31 March, 2026, from INR 10,011 crores for the previous year. We are quite happy with the rapid gains in beer growth given that it was only last year that we became the first Life Insurance company in India, to close the INR 10,000 crores mark in VNB. Further, net VNB margin has improved by 360 basis points on a year-on-year basis to 21.2% for the [indiscernible] '26 from [indiscernible] on the previous year. [Audio Gap] The Indian [indiscernible] value as on 31st March, 2026, have been determined [indiscernible] crores compared to INR [indiscernible] as on 31 March, 2025. [Technical Difficulty] registered an increase of 10.5% on a year-on-year basis [indiscernible] for [indiscernible] as compared to INR [indiscernible] crores as on 31 March 2025. Our AAV has registered a growth of 5.08% on a year as product mix and new audit launches. At third of March 2026, we had a comprehensive set of 58 products, excluding the [ Pradhan Mantri Jeevan Jyoti ] available for new business, including 36 exclusive individual products exclusive group product on product, which is eligible for group as well as individual business. In addition, we have 7 individual riders and [indiscernible]. Post 2026, we have withdrawn on products, namely LIC [indiscernible] premium. The number of policy sold. During the year ended March 2026, we sold [indiscernible] new policies as compared to 1 crore 77 lakh 82,975 new policies in the previous year, registering a growth of 3.7% on a year-on-year basis. The agency workforce. As on 31 March 2026, the total number of individual agents was 14 lakhs 57,045 as compared to 14 lakh 86,851 as on 31 March, '25. Market share by a number of agents as much as [indiscernible] from March 31, 2025. Our number of policies sold basis, the agency for sold [indiscernible] policies during the year ended as compared to [indiscernible] policies during the corresponding period of last year. Further, 98.42% of our policies in the year ended [indiscernible] that's sold by our agency fulls -- when seen on a premium basis, 91.75% of the new business premium came from our agency cannel in the financial year ending of 2025, '26. Contribution by Banca and alternate channels. Our background alternate channels, growth has been the continuous story of increasing volumes and larger intrastate market share within our channel mix. Back assurance and outer channels character and new business premium income of INR 5,076 crores or March 2026, as compared to INR 3,496.10 crores for the previous year, registering a growth of [indiscernible]. The new business premium income carried through banks was INR 3,151.33 crores for the year ended 31 March, ''26. And for the corresponding period last year, it was INR 2,576.7 crores, thereby registering a growth of 22.30% on a year-on-year basis. Further, the [indiscernible] channels collected new business premium of INR 1,924.74 crores for the year as compared to [indiscernible] for the year ended 31 March, '25, registering a growth around 9.3% on a year-on-year basis. The share of visual new business premium from our bancassurance and all trade channels has risen significantly to 7.5% in FY '26, marking a notable improvement over the 5.59% achieved in FY '25. Before I move on to other areas, I would like to [indiscernible] our listing, we have quite harbor an ambition to cross a level of INR 5,000 crores through [indiscernible] channels. And this financial year, we achieved this date, and we are very happy about it. Our overall expense ratio for the year ended 31st March 2026, the overall expense ratio was 11.91% as compared to 12.2% for last year. Therefore, there is a decrease of 51 basis points in our overall expense on a year-on-year basis on a premium basis, the [indiscernible] for [indiscernible] month up to 31st March 2026, at [indiscernible] 68.98% [indiscernible] respectively, compared to [indiscernible] 63.12%, respectively, up to the year end 31 March, '25. On a number of quality races, the persistency for [indiscernible] the year ended 31 March '26, stands at 64.87%, 57.65%, 55.29%, 49.78% and 46.8%, respectively, as compared to 64.12%, 59.32%, 52.66%[indiscernible] '25. Our persistency metrics reflect continued strength with improvement on a premium basis in the 37 or months and enhanced romance on a parity basis on the 13th, 3months. We are also focusing our energies on improvement across certain cohorts that we have seen a drop. Operational efficiency and digital progress. On a digital initiative, through the agent assisted on on the app, we have completed [indiscernible] policies during the year ended 31, 2026, as compared to 4,208 policies on the year ended 31 March 2025, thereby registering a growth of 56.08% on [indiscernible] the growth of 29.56% in the number of active agents in [indiscernible] for the year ended 31 March '26. The digital innovation and value enhancement initiative [indiscernible] project is being rolled out in phases, both for customers and distributors. Maybe shares and facilities have been activated and many more will be launched in a [indiscernible] manner. We have launched the new LIC customer app [indiscernible] on the 15th of April, 2026. My LIC is a next-generation vial application. So to redefine the experience how policyholders will manage their life insurance portfolio. Super sales at the app is a next-generation mobile application, but airlines market personnel. We hope that people logging to this call and those who will be hearing this recording later will be able to experience digital aspiration. I'm pleased to share a banker even to our Investor Relations team, who is continuously engaged with you. Claim. On individual claims trend, during the year ended 31st March, '26, we have processed INR [indiscernible] of claims, which includes INR 2 crores 41 lakh 25,943 maturity and total visit claims. On an amount basis, during the year ended 31st March, 2026, with total maturity claims, where to at [indiscernible] and the total declines were INR 4,855 crores. On a comparable basis, for the financial year ended March 31, 2025, the maturity claims were INR 2 lakh 37,313, our disclaims were [indiscernible]. Therefore, the maturity claims are higher by 17.97% and the debt claims are higher by 1.91% on a year-on-year. The marketing initiative update on [indiscernible] at our March 2026, a total of 45,000 women have been designated under Basak. -- successfully sell 21.4 lakh insurance policies and generating new business premium income of INR 2,848 crores in the year ended March 26. Our objective is to appoint is what was a key inhibition franchise, and we would like to inform that out of [indiscernible], we have covered [indiscernible] by recruiting [indiscernible] in [indiscernible] up to 31st March 2026. Before concluding, I would like to reiterate significant areas of our performance. Our not share of individual [indiscernible] business has now consistently settled at about 35% sequently, for the last few results performance updates. Our profit after tax has grown to INR 574 crores on a year-on-year basis. This is the highest fat in our history. [indiscernible] assurance and order channel registered a growth of 45.9% on a year-on-year basis, to INR 5,076.07 crores. This is the first time we have crossed INR 5,000 crores premium in [indiscernible] channel. VNB has increased by 41.6% on a [indiscernible] base basis for FY '26. This is our highest went till now. VNB margin has increased by 360 basis points to 21.2% for FY '26. This is the highest vnn margin until now. IEV has increased by INR [indiscernible] crores to INR [indiscernible] crores as on [indiscernible], registering a growth of 1.58% on a year-on-year basis. While maintaining growth in multiple parameters, we have kept our focus on costs. And as you can see, the overall expense ratio is down by 51 basis points to 11.91% in FY '26. This is the lowest overall expense ratio for us till now since listing. I would like to share that the Board of Directors has recommended a final dividend of INR 10 per equity share of INR 10 each equivalent to INR 20 per equity share pre-bonus issue basis. For the financial year, 22/22, subject to approval of shareholders in the Fifth Annual General Meeting [indiscernible] when we now look back at our 4-year journey post listing in May 2022, we feel happy that we have delivered more than what was told to the shareholders at the time of listing as our 3- to 5-year with regard to product mix, channel mix and margins. We are now very confident that having achieved significant intentional changes we are on a part of superior growth with a sharper focus on enhanced performance parameters. We extend our [indiscernible] to all our stakeholders for their complete support and faith in us, and we executed the. With that, I now hand over to the moderator to open the floor for question-and-answer session. Thank you very much.

[Operator Instructions] Your first [indiscernible] comes from the line of [indiscernible] Capital.

Congrats on a good set of numbers Three questions from my side. First of all, on the individual savings business on the non-par side, -- so there was a very strong show this quarter. I just wanted to understand that this significant growth that has come through this quarter, vis-a-vis, say, what we saw in 3Q also and were fourth quarter last year, what products should have led to this growth? And how much of this we can think to continue in the similar momentum going ahead in FY '27. That is the first question. then is in terms of the operating assumption changes that you have mentioned in EV and VNB walk. If you could give some color on that what what are the changes that you are seeing as well as in the [indiscernible] work the economic assumption changes, if you could highlight what is playing out there in this particular quarter because I think in 9 months or a number, if I remember correctly, was a negative number. So if you could highlight and lastly, if you give some color on how of this margin that has been repaid in the fourth quarter, what would be the trend for the individual business, how the margin would be?

[indiscernible] get marketing will talk take the first question. [indiscernible]

As far as the savings [indiscernible] the question which you have asked which contributed towards this growth actually be 48.4 percentage as far as the savings bucket is concerned. Given [indiscernible], which has given us a very good percentage as far as the savings in bucket is concerned. And in a having a good ticket size also, which has actually helped us in ensuring that this savings product is actually bringing a lot of premium [indiscernible] as far the savings product is concerned on the part side, [indiscernible] which has contributed to almost 40 percentage of the premium as far as that segment is on some. So these 2 products, I can say that they have done the best performance as well as the savings systems.

[indiscernible]

So first, about the VNB walk [indiscernible] 31st March 20 25, the VNB margin was 17.6%. Now as we hope they are sustainable in the mix of business and a very strong growth in the nonpar business as compared to [indiscernible] focus on all lines of business except for [indiscernible]. But then there is a strong growth on par segment. And therefore, the [indiscernible] to the total business has gone up. So this business mix, which has been put in to 3% of to the VNB margin. Then the RFR towards year if you see, it is ranging it ran form and then in some there's 100 to 84 basis points or so. So this RF has contributed to 3.4%. And with regard to this operating assumptions, as you asked, this is mainly because some lines of business expense has been realigning the based on experience. And in a few lines of business, the persistency also has been aligned. So the combined effect of the persistency and expense in some lines of business had just based on the experience, along with the GST impact, which have been taken as part of the quality expenses the contribution is a negative 2.8%. So this explains of BNB from 17.6% to 21.2% as of 31st March, 2026.

So if you could also explain the same for [indiscernible] In terms of the operating assumption changes and the [indiscernible]

So if you look at the [indiscernible] as of March 2025, the figure was [indiscernible] is contributing to the extent of [indiscernible], the operating assumption changes I explained that has also the impact on [indiscernible] has an impact on the embedded value to the extent of [indiscernible] negative in case of contribution to the embedded value. and operating experience variance, whatever we had assumed and because of the quality of the outcomes in each of the parameters, the EVO has contributed to the extent of INR 9,639 crores. Now the economic assumption changes and investment variance. One thing is what has contributed is RFR change. Then another important thing is that there is a in equity to the extent of 53,698 and the debt to the extent [indiscernible] so the total -- if you look at on the dividend paid, that is also taken out from this. So if you add and do all these things plus and minus, it reaches the fees as at 31st March 2026.

Right, sir. So sir, just 1 quick follow-up. In terms of persistency, like if you look at the persistency data that you have provided, we see that there is an improvement in terms of premium basis, slight improvement, while in terms -- sorry, improvement in terms of number of policies spaces, but while in terms of premium basis, there is a minor drop. I just wanted to understand, I think last year, you had highlighted that the strategy was to reduce lower ticket size products. So how this is playing out despite our now vis-a-vis last year, a larger maybe an average ticket size. And how does that reflecting in that positive persistency variance number in the [indiscernible]

If you look at it the focus has been to increase the ticket size. At the same time, we are also looking at increasing the overall number of sales because we are also focusing on contributing towards the mission of [indiscernible] the effect of increased ticket size for the purchase will be seen in the years to come. The maintenance uneasiness in 2024. October as part of our rent 3 new master set which are released. And the asset of that will be seen over a period of time. We are sure that the persistency will improve other cohorts. What happens some either the product mix difference and the kind of during covet and other things have also resulted in a 5 years [indiscernible] 61-month persistency being [indiscernible] will be losing upsetting in all the cohorts in the days to come. Certainly, the increase in ticket size is going to help us in achieving this.

Understood. Just if you could address the last question on some color on the individual business margin profit.

So we have given you a total [indiscernible] as compared to March 2027. If you look at on. If you look at the power [indiscernible], which is about 42% of the APE is contributing to the extent of 8% of VNB margin to that sort of VNB. Now [indiscernible] look at business individual non-par business contribution 22.75% is the proportion of APE, which is contributing to the extent of [indiscernible] of VNB. Similarly for the group [indiscernible] that was for individual business and the remaining [indiscernible]

This is for the full year?

Yes, this is.

Your next question comes from the line of Mr. [indiscernible] Kotak Institutional Equities.

[indiscernible] I just want a clarification. What you mentioned is par business is contributing to around 28% of VNB, individual non-par is 53% and group [indiscernible]

Sir, your voice is breaking up in [indiscernible]

Better now?

Yes. Yes. Please go ahead, sir.

So I'm just saying that of the economic assumption change January and of INR 17,000 crores, I think you just shared a breakup between it and debt. Can you strip the number?

Equity is 53,698 and [indiscernible]

Okay. Okay. Just a couple of things. If I look at the P&L statement, your credit debit fair value change is almost like INR 1.5 lakh crores [indiscernible] now I will just view this. I mean, your equity market book has not corrected or not gone down as much. I think even if we put the benchmark in license have also not come off so much. So why is the the debit fair value change so high?

There are 2 components to it. One is the realization of the fair value change, which happened in -- and thus, some portion and definitely is related to the market proposition as of [indiscernible] 2026 as compared to 31st March 2025.

The equity market, I mean if I look at the benchmark, NFC, et cetera, were almost flat, right, there would not be almost like a INR 1.5 lakh crore decline. The equity investment book of INR 15 lakh crores. So it's a fairly sharp decline.

Just to add here, there was a lot of volatility at the end of the financial in the past month, the month of March, they will value went down. But taking in the month of April, we have recouped almost 80% of the [indiscernible]

Got it. The other thing is on this accounting policy change, where you said that accounting of debt investment this is now going to be the amortization of discount versus the capital gains policy that has moved here. So you mentioned a number of around 11,000-odd roles. Now is this the net impact? Or is this the -- is this the discounting or the gross component? It's a gross component like we would have accounted this year-on-year this would have been recognized. So we are this is an timing direction for the past investments that were made in the past. So it is a gross impact. Sorry, [indiscernible] amortize. So this includes the duration of the book will...

Whenever those securities are bought from that point of time have recognized the amortization regular there should have been the impact [indiscernible] that I hold as of 31st of March, 2026.

Right. So what is the duration of your bond book?

[indiscernible]

No, I'm just saying that -- I mean, the way I would look at it is that the INR 11,000 crores into the duration of the bond book kind of reflects the unrealized gains that you're sitting on the bond portfolio. Is that a fair [indiscernible]

No, I don't think so. The entire bond book will not be an amortization basis [indiscernible]

If the policy has not changed, what would be the net impact on the surplus majority of the portion is going into the participating are older in the participating line of business. So out of this 11,000, roughly about 1,000 are. Okay. But as a notes to accounts say that this is essentially non-linked part of the book. online on into [indiscernible] It doesn't really impact the P&L. Sure. And I think just lastly, if I can squeeze. Your dividend policy, you have increased the payout, which is a good thing. I'm just curious to think about the payout ratio going forward?

So the payout ratio will depend on how the regulatory changes also happen. So we have to be a bit cautious in releasing it because the -- there are some expected regulatory changes, particularly in respect of the risk-based cattle are being planned to be introduced, we are not sure when it is going to be introduced. So we need to build some reserves so that we remain at a comfortable level of solvency throughout. That is one thing which we have to keep in mind. No, really what we think what our model is a rightful amount to be released immediately as a matter of our paying back to the shareholders. Before that, we have done that bonus issue. So bonus issue followed by an increased dividend report you have done this year. We expect it to be sustained in the years in the future also. That also has been kept in mind before the Board decided the amount of dividend to [indiscernible]

Your next question comes from the line of [indiscernible] from JP Morgan.

Congratulations on a good set of numbers. [indiscernible] are being answered. This just the line was a [indiscernible] there's change in operating assumptions -- most of your operating assumptions are actually yielding positive variances. So what is this apart from GST, what is contributing to negative changes of sale. Sorry, operating experience in is on 3 counts, that is persistency, mortality and expenses, but then why is your operating auto apart from GST, would be on negative 10.

Yes. On the GST [indiscernible]. And some lines of business, [indiscernible] expenses have been adjusted to the current year experience. Persistency for some length of business, where it has come down there, I think that adjustment for that particular line of business because the [indiscernible] has gone up. So that has been accounted for in that variance.

The another question I had is your persistency, positive variance is quite large. Now is there any sort of onetime element in it, any particular policy type, which is contributing to this. Because on a premium basis, there is some sort of negative persistency that we observed, right, and these disclosures.

So as we had the earlier [indiscernible] as well in 2024, we had -- the ticket [indiscernible] we have increased for most of [indiscernible] there -- the full experience is here to unfold. So we need to see where -- how going forward that unfolds. Before that, it has to be a line of business wise. We need to see where the persistency of the [indiscernible] has come down. And though overall, it has gone up for some lines of business, the impact has come down.

Next question comes from the line of Avinash Singh from Emkay Global.

My question again is around capital and dividend policy. So if we look in terms of the current solvency regime [indiscernible] solvency ratio that I would say the strongest in the sector. And of course, it has been rising. Now [indiscernible] to dividend, of course, your dividend payout [indiscernible] other I mean doing this kind of a capital [indiscernible] accumulation, and we would expect it to be even higher. But you seem to be a bit or reasonably more cautious around risk based capital whereas if we see some of your -- I mean, the private sector peers, they have kind of a hopes of risk-based solvency leading to some sort of releasing capital or you can less [indiscernible]. So what sort of -- what is the reason behind your [indiscernible] So what is driving that, okay, of fearing that there could be [indiscernible] digital department once you [indiscernible] solvency. I mean, what is it [indiscernible] capital?

Actually [indiscernible]. Every insurance company has to decide and when we declare results as in the practice that we have been trying to show that whatever we are demonstrating should lead to further improvements going forward. And our investors as well as possible should not be for a show. You would appreciate that when we go for the risk-based capital, LIC because of large book size of it with participating ties and our exposure to equity is significantly higher as compared to the competing company. Now on 1 side, that leads to improved returns to the [indiscernible] why we are seeing something like 8.9% to be the -- as compared to the previous year, something around 8.5%. On the other side, when the risk-based capital assessments are done, -- as of now, it has only been a quite exercise, so I will not get into details of that. But the point here is sensitivity to the volatility in equities is a significant factor for -- which will impact the risk-based capital. So as of now, I have not firmed up what is ultimate protocol, which will be formulated. But based on that thing, there is an area where we have to be concerned. We are in continuous discussion, and we have submitted our points of it. we are, as a prudent and responsible insurance company, already 2.35 is the situation which we are showing, and which will continue to [indiscernible]. We will like to first understand fully how this RBC is going to pan out? What is the implication of that thing so that when we have any shift in dividend policy, in fact, already started with the dividend decline moved on to INR 10, 6 or 4, then to [indiscernible] on pre-bonus issue, which is a significant improvement coming on top of bonus. -- we do not want to create expectations, which cannot be sustainable for future. And it is a responsible organization would like how the RBC pans out. And as I explained to you, because of the exposure into equity, the ultimate numbers, which would be taken, factors which were taken for determination because till capital is going to be dependent upon the factors which are applied to different parameters. There will be able to -- and also, we also want to ensure that we have to continuously grow. You would -- actually, if you deep dive into the outcomes you would see the lines of business which are most profitable to us. In fact, of the products which are most profitable to us on par, as is expected in the initial stages, consume caliber. So while we want to be prudent and on the high solvency side, we also want to grow. The growth aspirations are there. And we would like this capital to be consumed for the growth purposes also. So already LS is delivering on shifting to business profile as well as consolidating on solvency. And being aware about the likely possible scenarios in there is as capital. We are working it early in which continue to walk a growth trajectory and maximize and utilize our capital. And we should not run out of capital for any reasons. So as is possible distribution. We have while catered to the expectations, we want to be very sure about how the this capital scenario comes out and then take a sort of finality to the dividend policy will emerge only after that.

One follow-up on -- sorry, another question. Regarding your margins, so [indiscernible] came as sort of, of course, one-off this year. Now that has gone on 2-odd-percent of margins. If I remove that, the margins at 23-odd percent. Now next year, when I see the 2 benefits that you have derived this year, product mix changes, -- and also the economic assumption change is probably to movement in terms of safe and the absolute levels. Would it not be there? And also you will have to respond to with rising yields by offering a higher -- but nevertheless, in a kind of a stable product mix and economic adjunction. Is it fair to assume that, okay, the margins will be looking more clear to 23-odd percent next year?

I think we would not like to get into it. the beauty of a diversified product like what LIC is having, where some people tend to discount our group business, but that's also gaining the markets and the parameters in the scenarios and the factors continue to change. Something which is going to be a contributor this year can't become a challenge for the next 3 years. were to make up on the direction. And if you could see the margins in the last quarter was significantly higher than for the overall year. But we would like to see we -- this is the beauty of the portfolio, for example, we have got large annuity book size. We bought ULIP. We have got non-par business. We have got a group business. what we expect and what is our strategy and the markets where the insurance market or investment market will continue to change and evolve. And different things, for example, nobody perhaps was expecting interest rates to go up. right? But then the RFR contributed. Similarly, at times RFS may not contribute, but then that will lead to the market valuations going up. What is our strategy to be able to anticipate the market to be able to rebalance the portfolio and keep on working on the long-term strategies. The goal has been to cross 20, which we have achieved nobody can say this will be upward served, but that is the direction in which -- and as we have been saying from the beginning, margin is very important. But for LIC ultimately, is the VNB growth, which is the most important because that's the most balanced votion of the business growth and the Vin margin growth. We do not want to be going overboard on [indiscernible] because the customers are also very critical and the profitability is very important, but the customer base has to grow. So our ultimate strategy, as you mentioned rightly, yes, we expect margins to further improve, but that all depends upon various factors and that will have to be seen over a period time. This is what we have been mentioning that soon there will be time where about the margins and the margins for the market will converge, and there is clearly the direction in which we are seeing things spinoff.

Your next question comes from the line of [indiscernible] with Citi.

Firstly, if I look at your EV work, almost the second or the fourth -- second, third or fourth year where you have been sustainably reporting a positive other balance, which is ex of persistency, expense and mortality. So I just wanted to get some color on what exactly gets factored in this line item? And how should really want to think of it going ahead? My second question is on the persistency side now. can see 3 trends. I mean on a premium basis, we have seen some softness on the 13th kind of 5 months. But you have also strengthened your assumptions on persistency. But on the flip side, we are also seeing positive releases from the back book in the EV work. Now it would be great if you can kind of bifurcate this performance and persistency construct at for 3 major product classes, which is from the individual site power non-par and linked business, both on the back book and on the spine yearly performance that we have seen on a Y-o-Y basis. The third question was on the P&L. And 2 questions rather on this part. I wonder if you can give some color on why the operating expenses were high in the fourth quarter and also in terms of benefit payups, was there any lump-sum group related payout in the fourth quarter.

I'll take the last question first. There is no lump sum group payout that happened in the last quarter or anything like that. And some assured benefit individual policies which are sold in big numbers, 25 years back, which policies are maturing now. One cohort of policy is conventually and we expect the number of policies that mature in the last , we are already mentioned in the last year also, in 2025, '26 and '27 are expected to be significantly high. And all of those are with a high summer should also I take all those years. So there's a good amount of maturity things that are going to happen that happened in the last quarter as well as it will continue to happen until January of 2027. So we are well planned and are working towards that. So that is 1 reason why the outgo on the number of policies and particularly the benefit pay more on the -- in the last quarter. On the EV and VNB margin, I would like to ask my [indiscernible]

I correctly understand the question, that was on persistency. So -- and the persistency variance. -- operating variance persistency, which has even a bit positive by 0. I think that's the question on that. [indiscernible] Is that the question?

No. So basically, I'm trying to understand that if I recap the position and all the trending that you have done in the assumption changes on persistency across the 3 major product cohort, which is a non-par and linked. I mean if I were to look at it like sum of parts of the 3 products? And how have each of the product segments behaved?

In fact, as I mentioned earlier, in group business, because the comps switched in some kind of there that persistency for the. And simultaneously in that year, the was assumed on the actual a little different on that. for group line of business, therefore, it will strengthen. For our business [indiscernible] so persistency assumption per se has not changed. And that has contributed to a positive of 24. Actually, just to clarify on that these resumptions are set every year. And then it is largely drawn from the previous year experiences, right? You would have appreciated a ban, which has come into which already sorted of time, we had to largely drop off on the experience of the past. And good thing is with the changes which have happened in the previous years, when the assumption set, it is expected that we have to first actually believe that it is going to change. The results in largely coming from [indiscernible] for all the changes which have happened in the last -- since October 2024 or so. Ticket size has improved. The net business has improved, not across the entire portfolio, but for particular policies, which are beneficial to earners. Because of that, the cash contribution has come actually in almost all lines of business, it has been positive contribution has come onto that number largely coming from participating in group business, a small amount coming from on [indiscernible] also because the chunk of business is there.

Got it. If I can just -- if you can take the question on the other variances, which have been reporting a positive number for quite some time now.

On which operational variance you have.

In the operating variance, you divided it into 4 buckets, right, persistency, mortality expense and others.

Yes. So expenses as I have explained that has contributed positively as the experience is better than what was assumed. The persistency also has contributed as we see that mortality is almost flat. So there's no big variance on account of mortality and morbidity. So these are the 3 areas on which this has been divided. So persistency is INR 3,509 as we said. The expense also it is a positive. But on -- while I say this, the GST impact, this is a net of GST impact. GST impact has contributed negative to that...

And if you're talking about the bracket of the others, there's not much difference as compared to the last year. That is coming for some of cost of residual nonresidual risk and the inflection cost of capital and slight model changes are reserve differences which are there. So it's about slight changes compared to the last year is there. So largely, as [indiscernible] actually just explained, coming from the persistency and the expenses also. So these are the main contributors to this.

The. Next question comes from the line of [indiscernible] from

[indiscernible] that's question number one. Question number two, I was looking at your agency...

The voice is not coming clear. It's not audible.

Yes. So my first question was on non-par pricing. So I just wanted to know, have we done any revisions to the IRR over the last 12 months? And secondly, if I look at financial year '27, do you intend to increase any offering rate in the non-par category? My second question was in terms of the agency count. So I was looking at your agency count at the end of financial year '25, we were about 1.48 million. And now we are at about 1.45 million at the end of March 2026. So there have been kind of a reduction. And obviously, our market share has also kind of come down in terms of number of agents. So how should we see that going forward? And lastly, in terms of the number of policies sold. So if I look at individual policies sold, they have gone up by 4%. But if I look at the policies sold by bancassurance and alternate channels has declined by a very strong 36%. So just wanted to know the reason for that.

On the first question of the IRRs you just mentioned about, the IRR is a factor which depends upon the available investment opportunity, not necessarily from a year-to-year basis, but for the duration for which the products are priced as well as for the competitive reasons. And then there has to be a balance between what IRRs can be given in the products in a competitive scenario, ensuring that the policyholders reasonable expectations and competitive scenario both are met. plus, as we have been asking in the previous question, ensuring that the margins are not compromised. So we'll continue to watch and see whether there is a possibility of -- also added to it the hedging possibilities, particularly in the nonparticipating portfolio, how much of the risk can be hedged because as of now, the hedging instruments are not available for very long duration. So all these constraints and opportunities have to be balanced. And that is the reason depending on the investment opportunities, possibly suppose the investment goes up in a particular year does not mean that it is going to be insured for 15, 20 years of the life of the policy. So we have to take a very conscious call, particularly in case of the non-par products where everything is guaranteed. And as the VNB margins go upwards, they can move in a different direction if proper calls are not taken. So that is an important area. And definitely, we believe that giving best value to the customer is the starting point for the business growth and for the purpose of sustainability of an insurance company. So wherever we believe whether these are the annuity products, and we have been giving one of the most competitive returns, if you could see in our nonparticipating products, that's why a major uptick. This is the outcome of the appropriate pricing and value to the customer that has been the focus for us, and we'll continue to work on that direction. As far as the agency growth is concerned, you have rightly pointed out that there is a small reduction in the number of agents to the tune of around 30,000 coming to around a negative variation of 2 percentage. But let me tell you that over so many years, if you look at even the increase or decrease as far as our net agency addition or deletion is concerned, it is in these type of numbers only, and it has not -- it has never affected us as far as the business is concerned, basically, the current year, we'll be looking at better recruitment as well as we'll be having a lot of initiatives to ensure that the quality of the agent is going up and the productivity is going up. So the total focus will be on that to ensure that this is taken care of. And also, we'll be taking care of new recruitment as well as ensuring that the existing agents are served. That is what.

Just 2 more things I would like to add. Training will be a focus for the new agents as well as existing agents. Second will be young generation, new agents. younger age group agents are going to rope in in more numbers so that they are with us for quite some time, and they will address the requirements of the millennials.

Coming To reduction in number of sales through alternate channel performance decline. It is mainly attributed to one geographical issue where one of our corporate agency and particularly a micro finance institution was not able to concentrate that heavily and that has impacted. I think in the earlier quarters also the same phenomena was observed, and it was articulated. But having said that, yes, no doubt the number has come down in terms of -- slightly in terms of bank, but it's a conscious decision because some logging kind of concept that have been done because that was affecting the persistency part and it was a conscious decision to do from that kind of initiative by our partners and concentrate more on better and bigger ticket size so that going forward, we don't persistency part of it through our bass. So largely, the decline is attributed from the micro side. And overall drink universe in terms of bank as well as the alternate channel more or less remains intact. And now gradually, the shift has started in terms of picking up a number of sales. If you observe only for the quarter, that is Q4 alone, leaving aside the pain of earlier 3 quarters, Q4 has in fact given us nearly almost a 10% growth in terms of number of sales also and now the healthy trend is going to continue from here.

Ladies and gentlemen, we have time for 2 more questioners. Our next question comes from the line of [indiscernible]

On the VNB margin, you indicated that you expect VNB margins to continue to expand. Just wanted to understand what would be the building blocks there given you are saying that the non-par mix should now consolidate here? And if the yield curve does not steepen further economic benefit that you got this year may not recur how do you see the margin expansion from here playing out? So if you could help me understand this a bit better, it will be helpful. And my second question is we are moving towards IFRS you indicated on the call about risk-based IFRS, if you could help us understand how would the move from IGAAP to IFRS result in the risk -- how should we look at the risk translating into the CSM in force? If you could give us some color on how to think about that, that would be helpful.

Before I ask my [indiscernible] actually to give you more details, the focus would be on increasing the ticket size, the product mix that we are selling, though the mix may not increase too much, we would like it to consolidate or whatever it is. Two aspects, one, the ticket size of the policies going up; and two, improvement in persistency are the ones which may be -- which should be the drivers for margin expansion further. [indiscernible] actually can throw further light on.

Yes. With regard to implementation of Ind AS, a certain exercise we have already carried out a couple of reports, we have already submitted it to the regulator. We are further working on these things, but there are many works which have to go on before we can have a view on how the margins are going to be moving going forward.

The next question comes from Shobhit Sharma from HDFC Securities Limited.

Congrats on a great set of numbers. Sir, I have only one question, which is on your product mix. So if I look at the par business, which was not growing in the first half of the year or last year second half, has that business has picked up the momentum. And if I look at the non-par guaranteed business, that is now contributing to close to a low teens kind of a business mix. And HP, if I look at that is in high teens. So if you can give us some color around what kind of product mix are we aspiring for? Should we see more gradual shift towards the non-par guaranteed piece of business rather than the ULIP business, which we have seen historically? So yes, this is my question.

To straightaway answer, it's a bit difficult, but there is a impact of the flare in the market as well. When the markets give a good opportunity for people to invest and there is a good amount of interest that is being shown, ULIPs also get a good amount of welcome and so ULIPs also show a growth. We would naturally like to increase our contribution from guaranteed business, both in terms of non-par savings as well as protection as well as tap the market in full in terms of annuity business that is possible. So it has to be a growth in all the engines, but only thing is ensuring that the margins are kept in mind when we look at increases. When we have to fulfill our responsibility towards ensuring insurance for all by 2047 are in expanding the coverage as well as penetration in the market. We need to have a focus on the bottom of pyramid as well. So that is one reason why we have a good number of policies sold on the micro insurance as well as on small summer shoes also to cater to the needs of every segment of the society. They in turn result sometimes in lesser persistency rates as well as in terms of margins getting affected. But when we are focusing on a mix, which will have a good number of policies with high ticket sales on the non-par savings and protection, we expect the margins to be taken well care of. Anything else you would like to add.

Starting and the important point for the corporation is not focus on margins only. As we have been mentioning, our primary responsibility is to ensure that we provide the products and solutions which cater to the needs of the customers. And while margin became an important criteria, but we had the situation in which our entire book was participating business. And participating business from a margin point of low-margin business. But then we were leaving out a big segment of society which wanted guaranteed products. And eventually, in this situation, the guaranteed products offered us an opportunity to increase and go towards a segment where the market needed it for their needs, and this helped us improve the margins. [indiscernible] certain nonparticipating products because the interest rates coming down had a challenge on the margins also. So margin, we I'm not saying that we are focusing only on increasing margins. We actually reached 21%. This journey possibly can be very gradual and slow from here because we have seen even for the industry, the margins have been around between 20s to maximum 30s for a very short period of time. So we have reached the right level. What we want, as we mentioned earlier also, not only focusing on margin, but being the insurer of a responsible insurer and with a focus on insurance for all. So sometimes this becomes challenging. Margins can be improved by offering very few policies of high ticket size only, but then we have a responsibility to ensure this insurance for all by 2047 and contribute towards a larger cost. So therefore, this we'll have to ensure that we offer products, variety of products and train our agents and the marketing forces. In fact, what the question that you asked about the agency coming down is also because of the focus on the quality of the agency force and the productivity to be the focus. So all the balancing will continue to happen. We are at a very good level, 20% having crossed VNB having seen a 40% plus growth. Now here onwards, the changes will be dynamic depending on the market situation. But almost we are not looking for any major significant changes from here, but largely looking to consolidate from this position so that the VNB growth should happen. So either it should come through improved margins or either it should come through improved business growth. We are happy with either situation as long as the VNB growth can continue to be achieved.

Got it, sir. Sir, just a small follow-up. So this is related to current situation which we are in. So last 2 months, we have seen market being very choppy. So how have you seen the Europe demand or you have seen the non-par demand, guaranteed product demand being sustaining?

It is too early to comment. We are -- perhaps the effect of the crisis has not completely been circulated. But as of now, what we are seeing in the month of April, our performance has been good. It has been in tune with what we are doing in the previous financial year, and it has been better than that as well. We are -- till now, we are finding that our trajectory in terms of growth in volume has been there. It expands across all both participating as well as nonparticipating. We are seeing a good growth in terms of both the number of sales as well as the premium that's being accumulated.

Particularly the April figures have been testimony to that.

Ladies and gentlemen, this concludes our question-and-answer session. I would now like to hand the conference over to Mr. Dura Swamy for closing comments.

Thank you. To begin with, I sincerely thank you for joining us this evening for LIC's performance review for the financial year '26. Thanks for your continued faith and trust in us. Your very focused and sharp questions on a continuous basis keeps us on our toes, and we are able to dynamically adjust our business strategies to achieve better outcomes on all parameters. I do hope we have addressed all your concerns today. Should you require any further clarification or wish to continue this dialogue, our Investor Relations team remains at your disposal. Thank you once again for your time and engagement. Wishing you a very good evening.

Thank you. On behalf of LIC, that concludes this conference. Thank you, everyone, for joining us, and you may now disconnect your lines.