LIC remains optimistic regarding Q3 results

Life Insurance Corporation of India (LIC) remains optimistic about enhancing profitability in the current financial year, with management highlighting sustained improvements in Value of New Business (VNB) margins and a strategic tilt toward higher-margin non-participating (non-par) products. In comments following the release of Q3 FY26 results, senior executives expressed satisfaction with the market's positive reception to the declared performance. 

The company has maintained consistent strong results through a deliberate directional shift toward a better product mix, which has driven continuous gains in VNB margins. For the nine months ended December 31, 2025, LIC achieved a net VNB margin of 18.8%, up from 17.1% in the prior year period. 

The executive noted that the third quarter alone delivered around 21% margins, and the company anticipates further improvement of at least 1-1.5% for the full year, though this remains subject to market conditions, product sales mix, yield curve movements, and other external factors. A key highlight has been the rising share of non-par products in the individual business, which climbed roughly 10 percentage points year-on-year to approximately 36.5-36.8% on an APE basis (reported as 36.46% in official figures, with non-par APE surging 47% to Rs 10,045 crore). 

This shift aligns with market preferences for guaranteed return products, particularly as interest rates decline. On reaching a 25% VNB margin target (common among some private peers), the executive clarified that LIC is not fixated on a specific figure. Instead, margins will depend on prevailing market conditions, product demand, and investment scenarios. "We are expecting improvement certainly from current levels," he said, pointing to the recent quarterly performance as evidence of progress.