Life Insurance Corporation of India (LICI) Earnings Call Transcript & Summary

Ladies and gentlemen, good evening, and welcome to the LIC's Q1 FY '27 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. We have the senior management of LIC led by Mr. R. Doraiswamy, CEO and MD on this call. I now hand the conference over to Mr. Doraiswamy. Thank you, and over to you, sir.

Thank you. Good evening, everyone. I am [indiscernible] Doraiswamy, Chief Executive Officer and Managing Director, LIC of India. I would like to welcome all of you to the results and performance update call for the quarter ended 30th June 2026. The results declared today have been uploaded along with the press release and investor presentation on our website as well as the website of both the exchanges, BSE and [indiscernible] along with lease on this call are 3 Managing Directors, Mr. Dinesh Pant, Mr. Ratnakar Patnaik and Mr. [indiscernible] Senior users or the cooperation percent on this call are [indiscernible] Let me now present the key business, operational and financial highlights for the quarter ended 30 June 2026. . Market share. Our market share by first year premium income for 3 months ending 30 June is 6.10% at IDI as compared to 63.51% for the similar period ended 30th June 2025. We continue to maintain our leadership in the Indian life insurance market across both individual and group business segments. Now if you bifurcate this overall market share of 60% into segment-wise share of individual and group business, we would have a market share of 38.89% in individual business and 70.90% in the group business for the current quarter ending 30 June '26. On a comparable basis for the 3 months ending June 30, 2025, the respective market share for individual and grew business were 38.6% and 76.5%, respectively. For the quarter ended 30th June 2026, we have reported a total premium income of INR 1,250 lakh crores as compared to total premium income of [indiscernible] crores for the quarter ended at due 2025, registering a growth of 6.75% on a year-on-year basis. The individual new business premium income plus 536 was INR 14,351 crores as compared to INR 2,533 crores for the corresponding period last year thereby registering a growth of 14.48% on a year-on-year basis. Further, the renewal PM income for the q6 was INR 61,065 as compared to INR 58,938 crores for the previous year first quarter, thereby, reducing a growth of 3.61% on a year-on-year basis. Therefore, for the quarter ended June 3026 premium in total, individual premium income, including renewals, was INR 75,416 crores as compared to INR 71,424 crores or required 30 June 25, registering a growth of 5.52% on year-on-year basis. The group business total premium income for required 26 was INR 51,834 crores comprising a new business premium of INR 5,129 crores. In comparison, for the quarter 3 '25, the group business order income was INR 47,726 crores. and comprised in new business premium of INR 46,907 crores. Therefore, for this quarter 3, the total group premium has increased by 8.61% as compared to the similar period of previous year. Total annualized premium equivalent for the [indiscernible] INR 13,692 crores, which comprises individual APE of INR 7,532 crores and group APE of INR 6,160 crores. Therefore, on an APE basis, the individual business accounts for 55.1% and group business account by 44.9%. Further, of the individual APE, the power business account for INR 5,085 crores and the Napa amounts to INR 2,447 crores. Therefore, our non-par share of individual APE is 32.4% and part is 67.1% for the quarter ended June 30, 2026. As you may recall, for the quarter ended 30th June 2025 our [indiscernible] total individual business based on APE, stood at 30.3%. The profit after tax for the quarter ended 30 June 26, was INR 13,492 crores as compared to INR 10,986 crores for the 30th June '25, registering a growth of 22.8% on a year-on-year basis. The net VNB margin has improved by 250 basis points on a year-on-year basis from 15.4% from to 22.9% for the first quarter of the current year. Further, the net VNB has registered a growth of 61.32% on a year-on-year basis, from INR 1,944 crores for [indiscernible] INR 3,136 crores for quarter ended June '26 the solvency ratio as of 30 June '26, improved to 2.42% as against 2.17 on 30 June 2025. Assets under management has registered a growth of 4.1% on a year-on-year basis from INR 57 5,341.44 crores as of 30th of June '25 to INR 39,384.39 crores as on 30th June 2026. As on June 3, 26, we had a comprehensive seat of 59 products, excluding [indiscernible] available for new business, including 37 exclusive individual products 13 exclusive grew products and 1 common product for group and individual business, 7 individual riders and 1 group rider. Since April 2026 LIC new products have been launched, namely LIC's new [indiscernible] limited premium and 1 product has been withdrawn, namely IT agent single premium which are close in their plan. During the quarter ended 30th of 2026, we sold 31 lakh 2,000 and 281 new policies as compared to 3 lakh [indiscernible] new policies in the first quarter of the last year, registering an increase of 2.06% on a year-on-year basis. As on June 30, 2026, the total number of agents was 14 lakhs 45,692 as compared to 14 lakhs 86,222 as on June 30, 2025, registering a decrease of 2.3% year-on-year basis. The market share by number of agents as on June 30, 2026, stands at 43.9% as against 47.11% for 30th June 2025. On a number of policies sold basis, the agency core sold [indiscernible] during the quarter ended 30th June 26, as compared to 29 lakhs 99,433 policies during the corresponding period last year. Further, 98.51% of our policies in the quarter ended 30 2026, were sold by our agency force. And seen on a premium basis, 37% of new business premiums came from our agency channel in the quarter and June 30, 2026. Bank assurance and agent channels including micro insurance connected new regular premium income of INR 907.14 crores for the quarter ended 30 of June 2026 as compared to INR 851.92 crores or require ended June 30, 2025, registering a growth of 5.25% on a year-on-year basis. The new base premium income connected through bank was INR 483.39 crores for the end June 30, 2023. And for the curcumin period last year, it was INR 528 907 crores, thereby reducing a decrease of 8.62% on a year-on-year basis. Further, the alternate channels corrected new business premium of INR 423.5 crores for the 30th of June 2026 compared to [indiscernible] crores or required 30 June 2025, registering a significant growth of 27.27% on a year-on-year basis. Our [indiscernible] rate channels account for 6.3% of is the premium for required 30 June '26 as compared to 3.89% from the same period last year. For required the overall expense ratio was 10.63% as compared to 10.47% for the same period last year, therefore, an increase of 15 basis points in our oral expense ratio on a year-on-year basis. On a premium basis, the persistency for the 13th, 21st, 37th, 49th and 61st month after the 30 June 2026, stands at 75.3%, 69.8%, 67.50%, 64.04% and 61.12% respectively as compared to 75.6%, 71.5%, 67.7%, 63.45% and 63.85% respectively, up to the [indiscernible] ended June 30, 2025. On a number of policies basis, consistency about 13, 25, 37 49 and 61st month up end of June '26 stands at 66.45%, 58.07%, 56.14%, 51.27% and 48.74%, respectively, as compared to 64.35%, 60.15%, 54.23% 50.79% and 51.12% respectively, up to the quarter ended 30th June 2025. Our digital initiative through the agent, as I said, [indiscernible] application, we have completed 4 lakhs 46,925 policies during the quarter ended 30th June 2026 as compared to 3 lakhs 47,948 policies for the period ended 30th June 2025 thereby registering a growth of 25.56% on a year-on-year basis. There is a growth of 15.29% in the number of active agents in the application for 3 months ended June 30, 2026 a year-on-year basis. The launch of -- my LIC and Super sales at mobile application in April 2026 marked a significant milestone in MIC's digital transformation journey. Introduced LIC's digital innovation value enhancement initiative, dye, these applications are designed to enhance customer experience, improve operational [indiscernible] and strengthen digital accessibility. The MLIT app provides one-stop shop for all insurance and servicing needs of the customers and provide a comprehensive digital servicing figure. [indiscernible] Empowers LIC agents and intermediaries with a comprehensive digital workspace by offering real-time access to customer information, commission details, business performance, renewal tracking and intelligence intelligent sales insights. Together, these applications reduce paperwork, streamline service delivery, promote transparency and enable faster technology-driven interactions between LIC, its customers and our sales force. This initiative reflects LIC's commitment to becoming a modern customer-centric and digitally enabled insurance organization. While supporting India's broad mission, broad ambition of digital financial inclusion. On the individual claims front, during the quarter ended 30th June we have processed 37 lakh 27,812 number of claims, which includes 35 lakhs,35,876 claims due to maturity and [indiscernible] benefits. On an amount of -- on the annual basis, during the cost quarter ended 30 June '26. The total maturity claims were INR 57,099 crores and the total net claims were INR 5,934 crores. On a comparable basis for [indiscernible] the maturity claims were INR 58,584 crores and disclaims at INR 5,872 crores as therefore, the maturity gains are higher by 12.88%, and the debt claims are higher by 0.97% on a year-on-year basis on a number of sales basis, the maturity claims have decreased by 10.4%, and the debt claims have decreased by 3.09% on a year-on-year risk. As of June 30, 2026, the total of 2.87 lakh women have been designated as [indiscernible] successful selling 4.52 lakh insurance policies and generating a new business premium income of INR 65.91 crores. Our objective is to appoint at least on Baskin every gram franchise, and we would like to inform that out of [indiscernible] in India, we have covered 52% rampant by recruiting [ ViaSat ] in 1 last 1,620 up to the year June 2026. Before concluding, I would like to highlight significant achievements during the first quarter of '26-'27. New user premium income of individual business has grown by 14.48% year-on-year basis to INR 14,351 crores for required ended June 30, 2026. The profit after tax has grown by 22.81% in to INR 13,492 crores on a year-on-year basis. VNB has increased by 61.32% on a year-on-year basis for required 30th June 2026. Margin has increased by 50 basis points to 22.9% for the quarter 30 June 2026. [indiscernible] has increased [indiscernible] crores, registering a growth of 4.0% on a year-on-year basis. The total APE has grown by 8.2% to INR 13,692 crores on a year-on-year basis. Our nonpar share of individual APE has grown to 32.9% on 26 as compared to 3.34% in the same period for the previous year. The bank assurance and altering channels registered a growth of 5.25% on a year-on-year basis to INR 907.1 crores. Our solvency has increased from 2.1 last year at the end of first quarter, 2.42 for required ended 30th of June '26. Before I close, I would like to mention that recently, the government of India has sold 6.5% stake in LIC via an off of our sales, which have been well revived by the market. With this 65% IFS, our public float rises to 10%, and we are now compliant with the currently applicable minimum public shareholding now I want to welcome the new shareholders through the OFS into LIC's shareholder family and also send the existing shareholders who have participated in IFS for their continued base in it. This year, on the first of September 2026. LIC has completed 7 years of existence, and we hope to bring many occasions of joy to our customers through innovative product launches and other initiatives. We sincerely thank all our stakeholders for their continued confidence in our strategy and its execution. I now hand over the call to the moderator to begin the question and answer session.

[Operator Instructions] The first question is from Swarnabha Mukherjee from 360 ONE Capital.

Congratulations on a great set of numbers. So sir, 3 questions from my side. First of all, if you could highlight what are the assumption changes in the VNB walk that you have provided, what are those assumption changes? And Also, the cost impact, is this GSP exclusion led or anything else to read into that? That is 1 question. Second is our unit reduced basically year-on-year basis or unit premium. Is this a deliberate decision? Or was it a function of the market and we should see some recovery back in ULIP in 2Q? Or if you could highlight the trends of unit sales in 2Q so far? That would be helpful. Thirdly, sir, also wanted to understand that what is the reason for the difference between the data in the IDA monthly release and the individual AP that we have disclosed. If you could give some color on that so that we can understand and estimate better from the coming quarters. And so these are my 3 primary questions. One -- another small thing I wanted to -- I just noticed that our number of agents at the urban geographies -- the absolute number has come up slightly. So is this a conscious choice of basically focusing primarily on the rural side? Yes, these will be my questions, sir.

I come to the assumption changes. I asked [indiscernible] to explain it further I refer to others. Yes, there has been an impact of the GST exemption or the initial lines of life insurance business. While the GSE has gone on the vigor lines and the premium, the nonavailability of input tax credit has had an impact on the overall expense ratio. And this comparison with the corresponding first quarter of last year, when we had the ITC available, we use something which has resulted in a 16 basis point increase in the overall expense ratio, that's 1 of the reasons, as you mentioned. User premium reduction is naturally a function of the market scenario when confidence in the market gets affected due to the high volatility in the market functioning and naturally, that's also one. I will put it the other way that we have been focusing on the margin-accretive business lines, and we have grown a good growth, as you would have seen in both non-par savings as well as nonpar protection. Yes, ULIP we do expect to come back by the market situation normalizes. And then the difference in RWA and APE, yes, they have 2 different components APE does not take into account the actual first year premium resealed subsequent to the new business completion. Whereas it takes into account the new business premiums received where the premium is multiplied by the frequency to arrive at the annual premium equivalent. So APE and WRP cannot be not be equal. We have a substantial growth in the fee renewal premium. The premium that comes out of the policy sold in the previous year is a component. So then that difference has be accounted for. On the agent front, yes, the number of agents reduction has been because of a good number of candidates have taken up [indiscernible] without fully understanding the requirement. So some of them who have taken up just thinking that it's going to be a tier position without having a need to perform after having realized that they had to perform it had quick. So we have a focus on weeding out nonserious candidates on the agency force, and that is something which will continue to happen. On the rural front, yes, we are able to reduce good growth where we have -- the thing on the urban front, we are trying to get back to the number of agents as -- and retain the numbers as efficiently as possible. I actually can talk about the asset strategies in the .

Good afternoon. I'm [indiscernible] Director . So VNB margin, as at 30th June 2026, was 15.4%, which as at 30th June 2026 is 22.9%. The significant impact is of business mix where we have shown a significant growth in individual non-par savings, particularly to the extent of 59.4% and the protection business, the growth is around 43.59%. . So this along with if you recall in our earlier meetings that we had in the year 2024 come out with products with higher copper size. So those also have impacted the business mix and the business growth, which I have just told you these 2 have contributed to a 6.5% positively to the VNB growth. As regards to assumptions, we have shown a 2.9% of positive growth on this, which is the combined impact of RFR during the year. and the experience on persistency on both individual and growth has been aligned with the current experience and also across the durations where we see that the variations and consistency differ -- so those have been aligned. And apart from that, there are other reductions such as CRM, work, et cetera. So all this put together have contributed to 2.9% positively. Look at the expense assumptions, expense assumptions, along with the impact of infotax credit, that has contributed to a negative of minus 1.9% if we add to all those things, that was to be 22.9% at the end of 30 June 2026.

If I may ask a couple of follow-ups. One was that, sir, this coming quarter, if ULIP has come back, should we expect that non-par run rate would continue in a similar step up like we have seen in 1Q? Or is there a possibility that 1 can cannibalize some of the volume like which was absent this quarter? And second is, sir, in this operating assumption changes and the GST impact -- how much will continue over subsequent quarters? And how much will be normalized, if you could give some sense, that would be it.

See the ULIP coming back in Q2 is something which will depend on the market improvement also. That may not cannibalize because we are focusing to the growth in total APE itself was slightly muted because of units not having been showing the growth that we are showing in the preyear quarter. So I don't think any cannibalization is going to happen. We would like to see that the non-par growth continues at the rate it has been growing from Q1 to Q4 over the previous year that will continue in the current year as well. Regarding -- so the impact, as expected, as I said, there are 2 things for Phase 1, the input tax credit loss, which is also taken as a part of the expense and the impact is included. The second important thing is the increase in volume of business because of the removal of GST on premium it -- so we have seen the traction now kicking for increase in the volumes. And the combined effect of the expense rationalization and this -- the GST into loss grade that has impacted minus 2% with regard to assumptions.

Right, sir. So do we think that this minus 2 will continue for, say, next 1, 2 quarters? Or would it come off or normalize?

Once the assumption change has been incorporated, I don't think it should have much of an impact on the streaming craters. Of course, when you compare quarter-to-quarter also, last year, quarter 3, this impact has already started hiring the changes of these are having its impact. So if at all, it's a comparison between current year and last year, Q1 and Q2 will be compared with no GST ITC for the current year vis-a-vis ITC available last year. That will be for Q1 and Q2. Q1 is already over.

Thank you -- thank you. The next question is from Supratim Individual Investor.

So my first question is, again, on the VNB walk that you have given, I just wanted to understand that the mix improvement and the impact from mix improvement that we have seen the individual or the products at the individual level also seeing an increase in margin because of the yield movement. Is there a positive impact from the product level margins because of that? That's one. Secondly, on the 290 basis point assumption in positive impact that you called out and you said that RFR and persistency has contributed to that. Just wanted to understand what proportion would be RF and persistency and is persistently a positive impact? Or just if you would clarify that. So that's the second picture. Then moving to the unwind part, just wanted to and what is the equity return and the debt to return that you are building in unwinding for this year? And what proportion of the unwind is typically relates to equity and debt if you could clarify that as well that would be helpful. last state, just wanted to understand where does this IDBI -- does it set in a policy holding accounts or the shareholders' account. Those are my 4 questions.

I'll start on the high stake has already been quite a number of times that LIC had a unified fund before the IPO and ID investment was before that. And hence, it continues to be in positive order funds for the waiting the stake sale. So that is as of things it stands today. TMB walk, I think again was actually to take it further.

Yes. So with regard to the margins that you said in par business and otherwise non-par business rate. So both have contributed positively. The contribution is more positive with regard to individual non-car business, particularly industrial part sailing and the term assurance with regard to par also, it is positive, but lower than that. The group line of business also has contributed positively to the VNB margin at with regard to the length of business, on assumptions, sir, RFR, the impact, if I can separately give it to you is a positive contribution to the extent of 5% plus in terms of a drag because the withdrawal experience in different places have been corrected in the assumptions. The impact is negative to that extent. And there are interactions in assumptions, which we take, the direction which we take. So the combined effect of all these things have been shown in 1 place, which is 2.9% positive. Unwind if there was a question on the unwind rate as well, if you could clarify that. [indiscernible] that we expect to have our net market will be to be cardio financial.

Okay. And just one clarification, sir. I think the same service as that.

So if you look at March, March 2026, IEV the unwind, which was driven at that time in the IEV walk, was INR 75,748 crores aortas provided the same. Now because there is no separate calculation of IEV at the end of this quarter, and therefore, no numbers have been provided...

And sir, just one clarification. On the PA nonparagroup, you said on has contributed positively. So that should be again -- all of the products have seen an improvement in margins, right at the product just wanted to clarify that I get that correctly.

Yes, that's correct.

Next question is from Manas Agarwal from Sanford Bernstein.

I actually had one request and one question. The request is this time, we've seen a big gap in terms of the rate premium and the AT. other insurer also has this in the report monthly AP whenever a local numbers come. I think this will give investors conference in monthly to tea. So that is the request. The question is potentially, you see Q3, Q4 growth was good on early pace. Q1 APE growth, and I'm restricting myself to VNB growth of good AP growth soft in some shape or form at least on a not so high base. Your second half, your base also becomes unfavorable in both APE and margin expansion terms. So how should one think about a just cross-cycle medium term, 3 years, let's say, what is the eating for growth on top line, bottom line -- the CE and WRP, as I explained, they take a slightly different component into place. Does not take into account the renewal premium are the subsequent premiums after the policy gets completed during the first year, whereas the WRP takes actually what has been reeled. If our monthly premium is taken at the beginning, only 1-month premium is taken in the credit. And in AP, did quantify by well. So last year, we had -- last few quarters, we have been slowly shifting our focus and a contribution from non-single premium, our regular premium had increased in the last year, thereby, the APE growth was compared to the previous year of hikes but this year, we are comparing with a similar situation last year was the current first quarter APE growth has not been that high. So WRP has been good because we have got a very good renewal premium also coming in. We expect that this will get more proud than the growth in LTE will also increase for the subsequent quarters and our focus on new business also increases as the year passes. I think that is something which we look at. Yes, request, we'll get it, we get it examine how best we can do that we'll see. As we go forward, I think there's not been much of an impact on the profitability because we are focusing continuously on value-accreting policies in a bigger way that you have seen a good growth in both nonpar savings as well as nonpar protection. And that focus will continue. So we expect the margins to improve, of course, the components from the RFR is not in our other components will be continuously under our focus. We'll try to improve our fiance in all the areas that we can do.

The next question is from Gaurav Jain ICICI Prudential Mutual Fund.

Congratulations on a great set of numbers. Just one question on individual protection, sir. We are seeing good growth continuing and this quarter, again, it is 40% plus kind of year-on-year growth that we are seeing. . If you can help us understand what channels are majorly contributing in it on a small base -- but what steps have you taken? And do we expect it to continue growing further and something on that will be helpful, sir.

Thank you, Gaurav. Actually, we were a very strong savings players. Our contribution from savings used to be very high followed by annuities. And then we started improving our performance in ULIP. The one bucket, we were not very strong was, as you said, the protection. So we wanted to have that also added. And so we are seeing a good growth in the first quarter of this year over the [indiscernible] period last year. The channel which is contributing not out because in terms of number of policies, biggest contributors of individuals. Our Indigents have contributed substantially in this. However, in bancassurance, the focus is much more on any details in the units. There, again, we will be trying to get something from the protection bucket as well. If we can continually hope to increase -- this increase in protection performance to continue for summer quarters, certainly because our focus is to increase production also in the -- as part of our business line.

The next question is from Prayesh Jain from Motilal Oswal Financial Services.

To understand again on the [indiscernible] changes, operating assumptions, in March '26, also there was a negative hit. So it is still that impact that is going on or in 1Q FY '27 Also, there are some assumption changes, which is impacting this. .

So in the month of March, if you look at the impact of operating assumptions and changes in GST was that was provided was minus 2.8% the issue only separate the impact of assumption which constitutes all the RF withdrawals and other deductions like CRNHR, 2 and signal costs, et cetera. So there put together, they are contributing 2.9%. But as I said, impact of expense has come down to minus 1.9%, which includes the loss of the impact of loss of input tax credit. So basically, this should kind of keep reducing with time and probably second half of FY '27, this is not -- a bulk of it should not be there largely because GAP input tax credit should not have any implication. And the -- unless there is some more assumption changes that we do towards the end this should kind of reduce in [indiscernible]

As I explained earlier, the impact is 2 ways. One, the input tax credit, which is taken as expense and there is, again, the positive impact of growth in the volume itself. So you would appreciate that once the volume grows, and it exceeds the growth in the expenses put together, the other expenses and the cost of input tax play data. So the past quality expenses, the way it goes into assumptions will definitely reduce once the volume also increases.

Sir, and if I look at your P&L and large part of our profit surplus comes from the non-par book, in spite of the fact that we have a relatively smaller noncore book versus the power book. . Still the plus comes from the non-par book, maximum of the large part of the surplus. What explains that?

No. See, the nonpar business valuation happens on a quarter-to-quarter basis. While as a surplus emanating from power business is done only one winner yet when it comes to transferring it to the shareholders. Ultimately, 90-10 shares has to happen. So that happens only when the valuation gets completed at the end of the year. So you will see the impact of power business surplus only in the quarter 4. First to 3 quarters will have on demand for surplus coming in.

But in FY '26, if you look at the numbers, the large part of the surplus was from non-par book.

See, as the metro business itself, for 90% of the supply goes to the cost orders, only the and 10% gets transferred. So the idea of a directional change in the proportion of business between bar and land far. It started only are, we started getting into -- we went in to buy a public publication this will contribute. And also, we have the funds earmarked for available solvency margin, which is intense and kept, the accretion on that also contributes to the improvement to the shareholders' profits. What would be that number today interest is at INR 10,000 crores, INR 18,000 crores.

That is the INR 1,000 crores will be the book value, right?

Yes, book value.

Was it the market value of it?

It's fluctuate.

Okay. Last question. For the full year, what would be your outlook for the VNB margin, we have given a 21% -- we have given such a strong margin in this quarter. What should we think about the full year VNB margin for [indiscernible]

W E don't normally give us guidance, but we expect it to improve over the next few quarters as well, of course, keeping the one uncertain factor of the RFS. Otherwise, the margins should keep improving as we continue to focus on improved efficiency in terms of operations, which will result in overall expense ratio coming down. And also for the business coming out of value-accretive lines of business improving in subsequent quarters. So from this Q1 base also, you expect the margins to improve further.

The next question is from Harish from ASMSEC. .

Last question on mining. We have seen a improvement due to product in exchange. And that what we are doing is due to better product mix and improvement prepaid share how much is due to better mix and how much is due to improvement purchasing margin that was one. And secondly, we have seen a sharp improvement in one part in the same category. So if you can highlight which are the products which are driving that and which are the initiatives from our end which are made across segments like nonpar segment, par and which are key initiatives are trying margin improvement is .