LIC expects value of new business to grow as sales recover in second half

R Doraiswamy, CEO and Managing Director of the Life Insurance Corporation of India (LIC) expects continued growth in the value of new business (VNB), supported by strong top-line expansion and cost rationalisation.

“We are looking at products offering us a good VNB, and that I expect to grow,” he said, though he acknowledged the impact of the loss of input tax credit under the new goods and services tax (GST) exemption for life insurance.

He noted that the company remains cautious but optimistic. “Our aim is to see that it doesn’t impact us at all,” Doraiswamy said, referring to the GST-related cost pressures.



He said the company’s top-line performance for the first half of the financial year 2025-26 (FY26) fell short of expectations due to regulatory changes and GST-related disruptions.

“Yes, the top-line performance for the first half has not been up to expectations,” Doraiswamy said, explaining that LIC had to modify its existing products last year to align with a new master circular issued on October 1. The move required increasing the minimum ticket size for popular products, which led to fewer policies being sold, particularly in the ₹1 lakh to ₹2 lakh range.

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He added that the introduction of GST reforms in early September also affected sales. “There was a reduction, or even a stoppage, of people willing to buy life insurance in anticipation of it becoming cheaper from September 22,” he said, noting that business lost during this period could not be recovered in the remaining days of the month.

Despite these factors, Doraiswamy said LIC has started seeing improved business momentum. “We are having a good volume of growth in the second half, which has started in October itself,” he said, expressing confidence that the latter half of the year will perform better.

LIC, which has a market capitalisation of ₹5.84 lakh crore, has seen its shares fall about 0.52% over the last year.

For the full interview, watch the accompanying video

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