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LIC Bounces Back After Pandemic Slump, Aims for Strong Finish
16 Nov
Summary
- LIC records 21% drop in new policies in H1 FY26 vs H1 FY25
- Regulatory changes and GST reforms impact sales, but LIC confident of recovery
- Insurer aims to catch up and show good performance by end of FY26
In the first half of the current financial year (H1 FY26), the Life Insurance Corporation of India (LIC) recorded a 21% year-on-year drop in the number of new policies sold, from 91.7 million in H1 FY25 to 72.6 million. This decline was primarily due to regulatory changes and the implementation of GST reforms.
To comply with the Master Circular on Life Insurance Products, LIC had to modify almost all its available products, including raising the minimum sum assured under its most popular savings products. This resulted in a sharp fall in the number of policies sold, particularly in the ticket sizes between ₹1 lakh and ₹1.99 lakh.
Additionally, the announcement of GST exemption for the life insurance business, effective September 22, 2025, led to a near-complete stop in policy purchases during the 15-day window before the exemption came into effect, as customers waited to benefit from the tax relief.
However, LIC's CEO and MD, R Doraiswamy, remains confident that the company will be able to catch up and show a good performance by the end of the current financial year. He emphasized that the insurer's focus will be on increasing the top line substantially in the second half of FY26 to offset the impact of the discontinued input tax credit, as well as improving profitability by focusing on larger ticket sizes and a more profitable product mix.
