LIC Eyeing 200-300 Bps Rise From New Business Margins In FY26: CEO Siddhartha Mohanty

As Siddhartha Mohanty, chief executive officer and managing director of Life Insurance Corporation of India, prepares to retire, he leaves on a strong note, steering the insurer through a year marked by improved profitability, record policyholder bonuses, and product innovation. Notably, LIC’s Value of New Business margin rose by 80 basis points to 17.6% in financial year 2025, and the company is now targeting a further 200–300 bps increase, aiming for 20% by fiscal 2026.

This improvement is largely driven by LIC’s continued strategic shift towards non-participating (non-par) products, which offer higher margins compared to traditional par offerings. Non-par now comprises nearly 28% of LIC’s product mix.

However, Mohanty emphasised that LIC would not abandon its traditional strength in participating (par) policies, which still represent over 72% of the portfolio. LIC recently declared its highest-ever bonus of over Rs 56,000 crore for par policyholders, underscoring the segment’s importance.

Mohanty acknowledged the challenges faced due to product replacement regulations, which caused temporary disruptions in growth. However, the corporation regained momentum in the fourth quarter of financial year 2025, particularly in March. While annualised premium equivalent and embedded new business premium growth were subdued, LIC managed to record a 6.45% increase in first-year premiums, outperforming much of the industry.

Looking ahead to fiscal 2026, Mohanty expressed confidence in stronger EP and WRP growth, supported by distribution expansion and better product positioning. Notably, LIC’s agent network is adjusting to recent regulatory and ticket size changes, which should stabilise by the next fiscal year.

In addition, the “Bima Sakhi” initiative, launched in December 2024 to empower rural women, has significantly boosted female participation in LIC policies, rising from 28% to over 34%.

LIC is also witnessing strong growth in ULIPs, with a 166% rise last year, and is expected to introduce new offerings based on market demand. On the bank assurance front, the channel contributed 5.6% to overall premiums in financial year 2025, with further growth anticipated.

Despite a slight dip in market share, LIC remains focused on profitable growth rather than aggressive expansion. Its embedded value grew by 6.8% in fiscal 2025, and Mohanty expects this to improve further, aided by disciplined investments and a contrarian strategy.