LIC Eyes Strong Second-Half Growth as GST Cut Boosts Sentiment

Life Insurance Corp. of India expects business growth to pick up in the second half of 2025-26 backed by the Goods and Services Tax cut on insurance premiums and steady traction across product lines, Chief Executive Officer and Managing Director R. Doraiswamy said after the September quarter results.

"We are seeing good traction in the second half. On the GST front, we decided to pass on the full benefit to customers,” Doraiswamy said. The GST Council on September 3 scrapped the 18% tax on term life and health insurance premiums for individuals, effective September 22.

LIC’s net profit for the September quarter rose 32% on year to ₹100.53 billion, driven by lower commissions and employee expenses. The value of new business margin improved 140 basis points on year to 17.6%.

Doraiswamy said the tax exemption will likely lift volumes and top-line growth while the company continues to control costs. “Our focus is on profitable growth and sustained profitability rather than worrying about market share,” he said. LIC’s market share in first-year premium income was 57.1% in September, compared with 58.2% a year earlier.

On expansion plans, Doraiswamy said LIC is exploring entry into the health insurance business but will wait for clarity on the proposed insurance bill that allows life insurers to offer general insurance products under a single licence. “We will make a calculated move when the timing and structure are right,” he said.

The insurer has also stepped up hedging through bond forward rate agreements, covering about ₹120 billion in exposures since March. “Rates are still firm, so we are not in a hurry. We will gradually move from bond trust to bond forward,” the management said.