Life Insurance Corporation of India (LIC) is maintaining its focus on sustainable growth and profitability while evaluating strategic investment opportunities. According to reports from Business Standard, R Doraiswamy, managing director and CEO of the state-owned insurer, emphasized that the company's VNB margin jumped from 15.4% to 22.9%, while market share fell to 60%. The company targets maintaining its VNB margin at 24-25% and achieving double-digit growth that is equal to or better than the industry average. In the first quarter, LIC grew by more than 10% and expects growth to remain in that region. As per Finance Interviews, Doraiswamy highlighted that the company is focused on achieving continuous, sustainable growth quarter after quarter, with VNB margins depending on multiple factors including product mix, ticket size, and demographic parameters.
LIC has reached 30-35% of individual annual premium equivalent (APE) through non-par products and expects this contribution to consolidate around these levels. As reported by Business Standard, the company is focusing on increasing the contribution from non-par products, which have been introduced primarily to meet customer preferences for guaranteed benefits. One-third to two-thirds mix would be ideal for maintaining margins, with the company targeting double-digit growth while maintaining its market leadership position. The focus remains on continuously improving factors within the company's control, including product mix, ticket size, and demographic parameters. According to Finance Interviews, LIC has seen increasing demand for guaranteed products, which has helped increase the share of non-par business and consequently VNB and VNB margins. Customers feel comfortable with products where benefits are guaranteed and not dependent on future performance.
LIC continues to focus on its traditional agency-driven model while improving its contribution through banks, corporate agents, brokers, and other alternative channels. According to Business Standard, the company has 1.5 million agents but has seen some decline in numbers while agency contribution has improved. LIC launched Bima Sakhi, a women-centric initiative that provides stipend support, and is focusing on creating more long-term, professionally focused agents through hand-holding, training, and improved productivity. The company maintains good partnerships with banks, with some banks being exclusive LIC partners while others operate under open-architecture models. As per Finance Interviews, LIC will continue to focus on improving the agency organisation, increasing agent numbers and enhancing productivity, while also improving contribution through banks, corporate agents, brokers, IMFs and other alternative channels. The focus is on agents who are serious, want to make insurance agency their career and continue performing.
LIC's investment strategy is determined by the type of business that generates funds, with non-par funds largely invested in fixed income to protect guarantees and ULIP investments following underlying product mandates. As reported by Business Standard, the company is exploring strategic investments in fintech companies that can provide services to LIC and meet regulatory criteria. LIC has investments in more than 350 companies and has taken strategic stakes across sectors, with the focus on companies with strong growth outlook and potential synergy with LIC's operations. According to Finance Interviews, the company is looking for investment opportunities, keeping in mind regulatory provisions and the need to generate sustainable returns with relatively lower risk. With interest rates currently high, LIC sees an opportunity to increase investments in higher-yielding fixed-income securities, particularly when they have good volumes of business from non-par products. The company has a strong internal IT team while technology is also procured from external vendors.
LIC has a very large real estate portfolio and is looking at all possible opportunities to monetize these assets. According to Business Standard, creating a separate unit to monetize these assets is one of the options being considered to ensure the real estate portfolio contributes considerably to profitability. The company is also evaluating strategic investments in health insurance opportunities, though the focus remains on maintaining its market leadership position while achieving sustainable year-on-year growth in an increasingly competitive insurance landscape. As per Finance Interviews, LIC wants the real estate portfolio to contribute considerably to profitability, and creating a separate unit is one of the options being considered.
