3 weeks ago
LIC flags household income pressure as Q1 profit climbs 23%
LIC is a very big insurance company in India that helps people save money and protect their families.
This story is about how LIC did in the first three months of its financial year.
The good news is that LIC earned a lot more profit than before — about 23 percent more.
But the person in charge, Mr. Doraiswamy, said people are finding it hard to save because they have less spare money left after paying for everyday things.
When people have less spare money, they buy fewer insurance and savings plans.
Some plans that depend on the stock market were also affected by a conflict far away in West Asia.
To do better, LIC is selling more plans that bring in higher profit, like plans with fixed benefits.
LIC is also reaching out to customers whose policies stopped to help them restart them.
LIC looks after a huge amount of money, about ₹59.39 trillion, for its customers.
The company says it is still too early to tell if the tough period is over.
LIC's profit after tax rose 22.81% to ₹13,492 crore in the April-June quarter, while total premium income grew 6.75% to ₹1.27 trillion.
CEO and MD R. Doraiswamy warned that shrinking household disposable incomes continue to weigh on premium and savings growth.
Value of new business (VNB) jumped 61.32% to ₹3,136 crore, with the net VNB margin expanding 750 basis points to 22.9%.
LIC attributed the profit improvement to a product mix shift toward higher-margin non-par and protection products.
Assets under management rose 4.1% to ₹59.39 trillion, and the solvency ratio improved to 2.42 from 2.17.
The West Asia conflict and market volatility were cited as factors affecting unit-linked plans, annuities, and timely premium payments.
- Who
- Life Insurance Corp. of India (LIC), led by chief executive and managing director R. Doraiswamy.
- What
- LIC's Q1 profit after tax rose 22.81% to ₹13,492 crore, but premium growth stayed muted as shrinking household disposable incomes weighed on savings.
- Where
- India.
- When
- April-June quarter (Q1FY27), with results discussed at a post-earnings briefing on Thursday.
- Why
- Shrinking household disposable incomes and market volatility linked to the West Asia conflict pressured premium growth, while a shift to higher-margin products sharply boosted profitability.
Key facts
- Company
- Life Insurance Corp. of India (LIC)
- CEO & MD
- R. Doraiswamy
- Q1 Profit After Tax
- ₹13,492 crore (up 22.81%)
- Total Premium Income
- ₹1.27 trillion (up 6.75%)
- Value of New Business (VNB)
- ₹3,136 crore (up 61.32%)
- Net VNB Margin
- 22.9% (up from 15.4%)
- Assets Under Management (AUM)
- ₹59.39 trillion (up 4.1%)
- Solvency Ratio
- 2.42 (up from 2.17)
Quotes
R. Doraiswamy
Chief Executive and Managing Director of LIC
“"Our focus will be on increasing protection certainly in the next few quarters. We want some big improvement in the contribution that we receive from protection."”
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“"We depend on the disposable income of the customers, and when that income gets impacted, there will be an impact certainly on the way people save."”
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